For the first time in years, Apple gave up its crown as the world's most valuable publicly traded company on Monday, at least for part of the trading day.
Shares of the iPhone maker have dropped sharply over the past several weeks, and the decline has erased about US$300 billion in market capitalisation from the company, which crested at a record US$1.1 trillion valuation in early October. The slump ultimately took the company's market cap below that of Microsoft's on Monday, the first time in more than eight years that Microsoft was worth more by this metric. It was also the first time since 2013 that any company topped it, ever since Apple eclipsed Exxon Mobil in size, according to an analysis of Bloomberg data.
Apple's market cap hovered around US$823.66 billion as of 3:15 pm in New York, while Microsoft's stood at US$823.90 billion, although the two spent much of Monday afternoon jockeying for the top seat in intraday action. Shares of Apple rose 0.9 per cent, erasing an earlier decline, while Microsoft climbed 3.2 per cent.
Apple and Microsoft have one of the most storied rivalries in Silicon Valley, one that goes back to the mid-1970s, when both were founded within a year of each other and focused on making breakthroughs in developing personal computers. Microsoft dominated in the dot-com era but subsequently lost ground as the Cupertino, California-based Apple launched such iconic products as the iPod and especially the iPhone, which would grow to become its most important product line.
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Yet now, that very product is among the the challenges facing Apple, with concerns over weak iPhone demand pressuring shares to fall more than 25 per cent from record levels.
Microsoft isn't immune to weakness in the technology sector, although it has held up much better, falling about 8 per cent from its own all-time high in October as investors take to its enterprise-oriented business, as well as the success of its cloud-computing division.
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While Apple analysts see it transitioning to a business model based more on services than unit sales, there could be more pain ahead for the stock, which could dethrone it from the number-one spot in a more decisive fashion.
According to Rich Ross, a technical analyst at Evercore ISI, Apple's stock "has another 18 per cent downside," which could take the stock to $140, its 200-week moving average. "It is not bullish when the biggest stock in the world is in 'falling knife' mode," he wrote to clients on Monday.
Based on Apple's Friday close, an 18 per cent drop would give it a market cap of about US$670 billion. That would put it below both Amazon.com, currently valued about US$770 billion, and Google-parent Alphabet Inc., which has a market cap of about US$730 billion.