Microsoft has overtaken Apple to become the world's most valuable public company, after its market value increased by more than $1 trillion over the past year.

According to Bloomberg , at the end of the trading session on January 11 (US time), Microsoft's stock price increased by 1.5%, raising the company's market valuation to 2.9 trillion USD, higher than Apple's 2.87 trillion USD.

Microsoft shares have surged 57% in value in the past year alone, driven by investor optimism about the company's artificial intelligence division and the success of ChatGPT.

“It’s simply the AI ​​generation right now,” said Brad Reback, an analyst at investment bank Stifel. “Creative AI will impact all of Microsoft’s businesses, whereas Apple doesn’t have much of an AI outlook right now.”

This isn't the first time Microsoft has jumped ahead of Apple in recent years. It did so in 2018, when its cloud computing business began to grow in 2021 while the COVID-19 pandemic impacted Apple's supply chain.

The first iPhone launched in 2007, propelling Apple to market leadership. Between 2009 and 2015, the company’s sales grew from 20 million iPhones per year to more than 200 million.

As device sales have slowed in recent years, Apple CEO Tim Cook has shifted the company's focus from selling more iPhones to selling users more apps and services on their existing iPhones. The strategy has helped Apple's annual revenue soar to $383 billion, nearly four times what it was at the end of 2011.

But Mr Cook’s strategy has shown signs of fatigue as the iPhone has become known more for incremental improvements each year than for big innovations. At the same time, iPad and Mac purchases have declined and revenue growth from services like Apple Music has slowed.

Last year, the company's revenue fell for four consecutive quarters, even as Apple's stock rose about 50%.

Wall Street analysts are predicting weak iPhone sales this year, as the company faces challenges including slowing consumer demand, a ban on Apple Watch sales in the U.S., and investigations into its agreement to make Google the default search engine on iOS.

In addition, China - the company's third largest market after North America and Europe - is also witnessing a clear decline in demand for Apple products, facing fierce competition from Huawei - China's largest telecommunications technology group, as well as the slow recovery of the country's economy over the past year.

Hoa Vu (Source: NYTIMES)