What you need to know
- Microsoft passed Apple as the world's most valuable company.
- Microsoft has a market cap of $2.45 trillion compared to Apple's $2.44 trillion.
- Quarterly earnings came out this week, which affected the valuation of both companies.
Microsoft passed Apple to become the valuable company in the world (via iMore). The Redmond-based hit a market cap of $2.45 trillion today to pass Apple's value of $2.44 trillion. Those figures are from the middle of a trading day, so the companies may swap back and forth a few times before the day closes.
Microsoft continues to see strong growth and earnings. During the first quarter of the 2022 fiscal year, Microsoft brought in a revenue of $45.3 billion, which is a 22% increase year-over-year. Microsoft Cloud revenue saw a particularly large spike. It earned $20.7 billion in revenue in FY22, which is a 26% year-over-year jump.
While Apple fell slightly behind Microsoft in total value, the company is hardly struggling. Apple reported $366 billion of revenue in the last fiscal year, meaning the company brought in an average of over $1 billion per day.
Apple CEO Tim Cook claimed that the company lost about $6 billion due to the global pandemic and the current global chip shortage:
The shortage isn't just disrupting Apple. It has affected most tech companies, including Microsoft.
Sean Endicott brings nearly a decade of experience covering Microsoft and Windows news to Windows Central. He joined our team in 2017 as an app reviewer and now heads up our day-to-day news coverage. If you have a news tip or an app to review, hit him up at email@example.com (opens in new tab).
Congratulations to Microsoft.
Oh, yay, the multi trillion dollar companies are playing "who's more valuable" leap frog. That's exciting.
Well, it depends on how they get their valuation and most importantly, how they use the money they make?
Are they using it to get more games to market, develop new products, improve security and features of existing ones, or does their money just sit, withering under the new age of inflation? Company valuation, like billionaires' worth, is just a number on paper not actual cash. A way of keeping score and judging the management team. It is a trailing indicator of the present but also an estimate of its future. Not meaningless. For example, TESLA just joined the trilion dollar company club because HERTZ signed up to buy 100,000 electric vehicles for its 2022 rental fleet. Then UBER announced they would be leasing some of tbose to rent out to its drivers. Most car companies making electrics aren't yet up to 100,000 a year so the bar for leadership just went up by 10%. Plus 100,000 car!s mean way more than $100M in net revenue and fleet sales/leases have been the most stable part of big car company's revenue. So their valuation jumped by $100B. Similarly, MS may "only" have grown GamePass by 37% instead of 47% (oh, tbe shame!) but the holiday quarter is still to add its share (in the ebook world, for one, content revenue explodes not in nov-dec, but in January as folks getting readers and tablets go looking for books to stock up on). And like car fleet deals, GamePass subscriptions (and Office365 and Microsoft 365) are sticky. Very stable revenue streams. And, like it of not, consumers gravitate to the big platforms because of network effects. Success breeds success. The bigger Gamepass gets, the more money they can justify for making games; the more games they make, the more subscribers they get; the more subscribers they get, the more money they make. Bill Gates called it a virtuous circle decades ago. Still true today. Bottom line: not only is Nadella's MS doing very well, the professional tea leaf readers see it doing better moving forward. That it may or not be tops is minor compared to the likelyhood of them hitting $3T in a year or two. That is significant.
What fjtorres said. It's not a game, it's about expected returns for shareholders. Buyers of the shares are the ones valuing the company. In the case of these two companies, clearly the company is delivering for shareholders. We know it's not a speculative bubble because the companies keep delivering profits (unlike, say, Bitcoin, which has no product at all except inflation hedging and money laundering.) There's also the issue of Covid and the uncertainty it causes, which means investors need a place to park their cash if they're not going out in a limb elsewhere. So as the economy returns to normal (who knows when) these huge numbers may ease a bit.
What they both said. My 401K is certainly pleased with these companies going back and forth even though it doesn't affect me personally. I wish I would have had the money (and the foresight) to privately invest in Microsoft during the end of WP days, then I would really be happy for a company being worth more than some nations.
And just 100 million poor in USA, and have no access to health center.
USA the sicker countries in the World.
And other countries do all their best to be "similar".
Health, Education, Food, Home just for rich. Other people are just "garbage". Money, money, just money Money, God of all Humans.
All countries have stuff for their people, but all countries must ask to rich if they can do something. Life who needs money to live is not very intelligent... Rich pays nothing and do nothing. It's The People who pay all and the People who do something.
Rich just received all benefit and give all expense to the People. Countries don't exist. All is controlled by multinational. You own all media, you own the "think" of The People.
Nothing change except that rich now are so rich that have no sense. But The People just need game, TV and their smartphone to be "happy".
Nothing is more enjoyable for the people than watching the rich on TV.
Nothing is more enjoyable for the people to see the poor bursting their guts in the air because we live in a system of monsters where money is king. Who makes the rich richer? The people.
Who pays taxes, levies, etc.? The people
Who pays nothing and monopolizes all the wealth? The Rich
Who is happy to always pay more for the rich and to worship them like Gods? The people
MS is better positioned to continue to increase their market cap given their diversified revenue streams especially in growth areas like cloud computing. Apple is still largely dependent on iPhone/iPad sales for their revenue, although they've made some inroads in diversifying their revenue streams in recent years.
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