July 21, 2024

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Which Will Be the World’s Most Valuable Company a Year From Now?

2 min read

Although Microsoft (NASDAQ: MSFT) held the title for a few months, Apple (NASDAQ: AAPL) briefly regained its crown as the world’s largest company by market cap this month. But then this week, Nvidia (NASDAQ: NVDA) passed it for the first time. As of Thursday, the Windows maker was back in first place again, but with all three companies holding market caps of around $3.2 trillion, in the near term, their rankings within the top three could shift often.

But what will matter more to investors is where stocks are heading over the medium and long terms. So which of them is most likely to hold the title a year from now?

The case for Apple

Apple was significantly trailing Microsoft until its Worldwide Developer Conference a couple of weeks ago. Although it announced several things during the event, the biggest launch by far was Apple Intelligence — essentially, Apple’s take on artificial intelligence (AI). Those features won’t directly generate more revenue for Apple, but the thing to note is the generative AI features will only be available on its latest model smartphones, the iPhone 15 Pro and 15 Pro Max — and of course, on the generations that follow.

This is huge. The current estimates are that more than 90% of active iPhones are older models. So, if Apple Intelligence turns out to be a game changer, it will drive an upgrade cycle stronger than any Apple has experienced since early in the pandemic.

If that new demand wave arrives, Apple’s sales and profits will rocket. That’s a compelling argument for the proposition that it will once again be the world’s largest company a year from now.

The case for Microsoft

Microsoft overtook Apple as the world’s largest company due to its heavy involvement with generative AI. Once Microsoft realized the impact this technology could have, it quickly developed an integration with the market leader, OpenAI’s ChatGPT, for its Microsoft Office products. To access these features, businesses or consumers need to pay an extra fee, which has…

2024-06-23 08:15:00

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