Microsoft surpasses Apple to become the most valuable company in the world

On Friday, Apple lost its title as the world's most valuable public company to Microsoft, as the iPhone maker's stock dropped about 2%.

Apple's sales dropped $6 billion in the fiscal fourth quarter as a result of ongoing global supply chain issues, falling short of Wall Street expectations. Tim Cook, Apple's CEO, predicted that the impact would be even greater during the current holiday sales quarter.

"Apple is also a lot more exposed to supply chain disruption than its less hardware focused FAANG peers," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

Apple's stock fell 1.8 percent to $149.80 at the close of trading, giving the company a market capitalization of $2.48 trillion. Microsoft, on the other hand, rose 2.2 percent to a record high of $331.62, giving the company a market capitalization of $2.49 trillion at the end of the session.

Apple announced a massive $90 billion share buyback in April, after repurchasing $421.7 billion worth of stock over the years. As a result, the company's outstanding stock pool continues to shrink, with 16.4 billion shares at the end of the fiscal fourth quarter.

Microsoft's stock has risen 49 percent this year, owing to increased demand for its cloud-based services as a result of the pandemic. Apple's stock has increased by 13% so far this year.

In 2010, Apple's stock market value surpassed Microsoft's, thanks to the iPhone, which made it the world's most valuable consumer technology company. In recent years, the companies have alternated as the most valuable company on Wall Street, with Apple holding the title since mid-2020.

Analysts say Apple has handled the supply chain issue well, but with Cook predicting more pressure, the company's performance could suffer as the holiday season approaches.

Microsoft, on the other hand, predicted a strong end to the calendar year on Tuesday. However, it warned that supply-chain issues would continue to afflict key units, such as those that manufacture Surface laptops and Xbox gaming consoles.