According to Reuters, Apple is in danger of losing its title as the world’s most valuable company to Microsoft after its stock dropped recently because of worries about iPhone sales.
Apple’s shares have dropped 4% so far in 2024, after going up 48% last year. This is because of new worries about the demand for smartphones. After going up 57% in 2023, Microsoft is up about 2% so far this year.
Apple lost 0.4% of its value on Wednesday, while Microsoft gained 1.6%. This made the iPhone maker’s lead even smaller. Microsoft is worth $2.837 trillion on the stock market, while Apple is worth $2.866 trillion.
On December 14, Apple’s market value reached a high point of $3.081 trillion. On November 28, Microsoft’s value hit a high point of $2.844 trillion.
In a client note released this week, Jefferies analysts said that iPhone sales in China dropped 30% in the first week of 2024. This is another sign that Huawei and other local competitors are becoming more of a threat.
The Vision Pro mixed reality headset from Apple goes on sale in the US on February 2. This is Apple’s biggest product launch since the iPhone in 2007. UBS said in a report released on Monday that sales of the Vision Pro would not have a big effect on Apple’s earnings per share in 2024.
Microsoft has briefly been worth more than Apple several times since 2018. The most recent time was in 2021, when worries about supply chain gaps caused by the COVID-19 pandemic hurt the stock price of the iPhone maker.
The prices of both tech stocks seem high compared to the money they are expected to make, which is a popular way to figure out how much a public company is worth. LSEG data shows that Apple is selling at a forward PE of 28, which is a lot higher than its average of 19 over the last 10 years. There are about 31 times forward earnings for Microsoft, which is more than its 10-year average of 24.
Apple missed Wall Street’s sales predictions for the Christmas quarter in its most recent quarterly report, which came out in November. This was because demand for iPads and wearable tech was weak.
LSEG says that analysts expect Apple’s sales to rise 0.7% to $117.9 billion in the December quarter. That would be the first time in four quarters that its income went up from the previous year. Apple will share its data on February 1.
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When Microsoft reports in a few weeks, analysts expect it to say that its sales went up 16% to $61.1 billion. This is because its cloud business is still growing.
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