Microsoft Surpasses Apple And Is Now The World's Most Valuable Public Company

Microsoft Corporation MSFT shares have been in rally mode since the software giant reported blockbuster quarterly results. The strong gains have helped the company topple Apple Inc. AAPL and occupy the pole position in terms of market capitalization.

Microsoft Edges Apple: Microsoft's valuation was holding tantalizingly close to Cupertino after the gains built on the back of Microsoft's quarterly results Tuesday after the close.

It took Apple's fourth-quarter disappointment to launch Microsoft to the top spot in terms of market capitalization. Apple reported weaker-than-expected iPhone sales, stung by supply chain issues, that dented topline performance.

Despite sell-side analysts rallying behind the company and predicting a return to order after the December quarter, investors were quick to punish the stock.

At press time, the market cap of Microsoft is $2.455 trillion, ahead of Apple's $2.432 trillion. Apple has 7.513 billion shares outstanding compared to Microsoft's 16.53 billion.

Related Link: Microsoft's Cloud-Powered Q1 Results Prompt Analysts To Lift Price Target

Microsoft and Apple have switched ranks as the most valuable company a few times in the past. After Apple held the spot as the global company with the highest market capitalization for about eight years, Microsoft wrested the lead, although briefly, in late 2018. At that time, the two companies had market caps of a little over $800 billion.

In July 2020, Microsoft's market cap moved above Apple's, and the former's superiority once again lasted only briefly. Apple came back up strongly to take the lead and reached the milestone of a $2 trillion valuation in August 2020, the first company to do so. Microsoft was almost a year behind Apple, as it reached the milestone in June 2021.

How The Future Stock Trajectory Will Play Out: Microsoft's first-quarter results, though showcasing broad-based strength, were propped up primarily by Cloud momentum.

Microsoft's results speak to a "cloud party" that's still in the middle innings of playing out for Microsoft, Wedbush analyst Daniel Ives said in a note.

These results and stronger guidance, the analyst said, will be enough to move the stock much higher into 2022.

At the same time, Apple will have a tough time navigating through supply chain issues, at least in the near term. Come 2022, Apple will remain vindicated as supply chain issues abate and turn a tailwind, analysts say. On a positive note, Apple's products, with the exception of the iPhone, and the Services segment performed strongly.

At last check, Microsoft shares were up 1.13% at $328, while Apple's shares were declining 3.47% to $147.27.