Microsoft has once again taken the lead as the world’s most valuable public company, overtaking Apple after the iPhone maker’s stock plunged due to global trade tensions. This dramatic shift in market dynamics reflects how tech giants are weathering the economic storm sparked by new U.S. tariffs.
Apple’s Stock Plunge Opens the Door
Apple’s stock dropped 23% over the past four trading sessions, bringing its market cap down to $2.59 trillion, while Microsoft now stands at $2.64 trillion. This marks a significant reversal, as Apple had recently regained its top position after a back-and-forth battle with Microsoft throughout early 2024.
The trigger? A sweeping tariff plan introduced by President Donald Trump. The decision to impose import tariffs on over 100 countries has jolted investor confidence, with the Nasdaq falling 13% in the past week alone.
Apple’s Heavy Dependence on China Backfires
Apple’s sharp decline is largely due to its heavy reliance on China for manufacturing and sales. Analysts fear that escalating tariffs could lead to higher production costs, which may be passed on to consumers. UBS analysts even predicted that the iPhone 16 Pro Max might see a price hike of up to $350 in the U.S.
Such potential price surges are making investors nervous, especially with consumer sentiment already strained.
Microsoft Seen as More Insulated
While Microsoft also saw its valuation drop from over $3 trillion, it’s considered more insulated from tariff volatility. Despite issuing disappointing revenue guidance in January, Microsoft is still perceived as a safer bet. Analysts from Jefferies recently said Microsoft is among the few software giants likely to weather the trade disruption more smoothly.
Its diverse software portfolio, including enterprise solutions and cloud services, helps reduce its dependence on hardware supply chains or foreign manufacturing.
The Battle of Trillions Continues
Both Apple and Microsoft — along with Nvidia — were valued above $3 trillion earlier this year. With market conditions rapidly shifting, the title of “world’s most valuable company” remains volatile. But for now, Microsoft is back on top, proving the resilience of its business model during global uncertainty.
