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13-06-2024
CUPERTINO/ NEW YORK: Apple once again became the world’s most valuable company on Wednesday, dethroning Microsoft from the top spot, as the iPhone maker pushed ahead in a race to dominate artificial intelligence technology.
Its shares rose more than 2% to $211.75, giving it a market valuation of $3.25 trillion. Microsoft’s market capitalization stood at $3.24 trillion, falling behind Apple for the first time in five months.
Apple shares had surged to an all-time high in the previous session, a day after it unveiled a range of AI-enabled features and software enhancements for its devices, a move that several analysts said would power iPhone sales.
At Apple’s annual developer conference on Monday, executives, including CEO Tim Cook, touted how voice assistant Siri would be able to interact with messages, emails, calendar as well as third-party apps.
The tech giant has trailed rivals such as Microsoft and Google-owner Alphabet in the red-hot field of AI, a reason why its shares underperformed this year compared to its peers.
Apple’s shares are up about 10% so far in 2024, while Microsoft has added about 16% and Alphabet nearly 28%. Some of the concerns over its weak share performance eased after Apple beat market expectations for quarterly results and forecast in May, and unveiled a record $110 billion buyback plan.
AI chip leader Nvidia, which briefly overtook Apple’s market value last week, is up a whopping 144% this year. Nvidia last had a market value of $3.06 trillion. Tesla is the only other ‘Magnificent Seven’ stock that has fared worse than Apple this year, with a more than 30% slide.
Apple unveiled a long-awaited AI strategy on Monday, integrating its new “Apple Intelligence” technology across its suite of apps including Siri and bringing OpenAI’s chatbot ChatGPT to its devices.
In the nearly two-hour-long presentation at Apple’s annual developer conference, executives including CEO Tim Cook touted how voice assistant Siri would be able to interact with messages, emails, calendars, as well as third-party apps. Siri will be able to write emails and change the tone of voice to suit the occasion.
Long known for a focus on user safety, the iPhone maker also signaled it plans to differentiate itself from rivals Microsoft and Google by placing privacy “at the core” of its features but Wall Street looking for more dazzling AI features and reassurance that would put Apple in good standing to compete on AI with market-leader Microsoft was lukewarm on the event. Apple shares closed down nearly 2%.
Apple’s stock, which trails those of other Big Tech firms this year, had rallied 13% last month in the run-up to the event.
“There isn’t anything here that propels the brand ahead of its as-expected trajectory of incrementalism,” said Dipanjan Chatterjee, an analyst at Forrester.
“Apple Intelligence will indeed delight its users in small but meaningful ways, it brings Apple level with, but not head and shoulders above, where its peers are at.”
Apple’s approach contrasts with the enterprise-first focus of its rivals. The company hopes these moves will convince its more than 1 billion users most of whom are not tech aficionados of the need for the nascent technology.
Apple executive Craig Federighi called Apple Intelligence “AI for the rest of us.”
Apple remains overly reliant on sales of the iPhone and some analysts said any boost from the new AI features was unlikely to materialize in the short term.
“In this early race, it feels that Alphabet, and even more so Microsoft, are in better shape following their initial moves and with thanks to their cloud assets,” said Paolo Pescatore, analyst and founder of PP Foresight. (Int’l Monitoring Desk)
