Microsoft has overtaken Apple to become the world’s most valuable public company once again. This shift occurred as Apple’s shares tumbled by 23% over the past four trading sessions, leading to a reduction in its market capitalisation to $2.59 trillion. Meanwhile, Microsoft stands strong with a market valuation of $2.64 trillion as of the latest trading session.
The broader market has been negatively affected by President Donald Trump’s tariff plan, which aims to impose tariffs on imports from more than 100 countries. This sweeping plan has sparked fears of a recession amid rising prices, with the Nasdaq index dropping by 13% over the same period. Both Apple and other major tech companies are feeling the pressure, as the market turmoil continues.
Apple, which heavily relies on Chinese manufacturing, is particularly vulnerable to the planned 104% tariff on Chinese imports. This tariff, set to begin on Wednesday, threatens to significantly increase production costs. Analysts suggest that these tariffs could push the price of the iPhone 16 Pro Max up by as much as $350 in the US, further denting Apple’s market position.
Before the recent sell-off, Apple and Microsoft, along with chipmaker Nvidia, had market valuations above $3 trillion. However, the ongoing trade war and subsequent market sell-off have reshuffled the standings, with Microsoft now leading the pack.
Jefferies analysts have noted that Microsoft appears to be among the ‘companies who we view as more insulated’ from the uncertainties surrounding these tariffs. This perceived stability has likely contributed to its current market valuation. In contrast, Microsoft had issued disappointing revenue guidance earlier this year, but it has managed to maintain investor confidence.
UBS analysts project that the tariffs could drive significant price increases for Apple’s products, exacerbating the company’s challenges. The heavy reliance on Chinese production makes Apple particularly susceptible to increased costs, which could ultimately impact consumer pricing in the US market.
Despite these challenges, the tech giants continue to navigate a volatile market landscape.
