Apple Reclaims Title as World’s Most Valuable Company, Surpassing Microsoft in AI Race

June 12 (Reuters) – On Wednesday, Apple once again became the world’s most valuable company, overtaking Microsoft in the competition to dominate artificial intelligence technology. Apple’s shares (AAPL.O) surged nearly 4% to a record high of $215.04, resulting in a market valuation of $3.29 trillion. In contrast, Microsoft’s (MSFT.O) market capitalization was $3.24 trillion, falling behind Apple for the first time in five months.

The stock surge occurred as the tech-heavy Nasdaq (.IXIC) reached a record high, buoyed by fresh signs of cooling inflation. Apple shares had already increased by more than 7% in the previous session, following the announcement of several AI-enabled features and software enhancements for its devices. Analysts believe these innovations will drive iPhone sales.

During Apple’s annual developer conference on Monday, executives, including CEO Tim Cook, highlighted new capabilities for voice assistant Siri, which will now interact with messages, emails, calendar, and third-party apps.

“All those questions about Apple lagging from an AI technology standpoint were answered at the Worldwide Developers Conference,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. “Some of the specifics about AI capabilities that are going to be integrated into the upcoming iPhones made it very apparent that there will clearly be demand for a significant upgrade cycle.”

Despite trailing rivals like Microsoft and Google-owner Alphabet (GOOGL.O) in the AI field, Apple’s shares have underperformed compared to its peers this year. However, concerns over its weak performance eased after Apple exceeded market expectations for quarterly results and forecast in May, and unveiled a record $110 billion buyback plan.

Apple’s shares have risen about 12% so far in 2024, while Microsoft has gained about 16% and Alphabet nearly 28%. AI chip leader Nvidia (NVDA.O), which briefly surpassed Apple’s market value last week, has seen a staggering 154% increase this year, with a market value of $3.11 trillion. Tesla (TSLA.O) is the only other ‘Magnificent Seven’ stock that has performed worse than Apple this year, with a roughly 30% decline.