Microsoft and Apple, titans of the tech industry, have long dominated the market, with their market capitalization reflecting their immense value.
While Apple held the crown for years as the most valuable company, Microsoft’s recent surge has seen it surpass Apple, with a market cap of $3.01 trillion compared to Apple’s $2.90 trillion. Both companies benefited from the AI boom in 2023, with Microsoft’s market value rising by 56.80% and Apple’s by 48.18%. This growth underscores their resilience and innovation in adapting to emerging technologies, making them key players to watch in the ever-evolving tech landscape.
Source: Trive – Koyfin, Nkosilathi Dube
In terms of revenue growth, Apple initially experienced strong top-line growth but has slowed down in recent years, notably due to weakening sales in China, where it reported a 13% decline in the latest quarterly report. In contrast, Microsoft’s revenue growth has been consistently upward, surpassing Apple’s since 2020, with a 5-year CAGR of 13.94%, nearly twice that of Apple.
Source: Trive – Koyfin, Nkosilathi Dube
Microsoft maintains a robust EBITDA margin of 48.59%, showcasing steady growth since 2016. In contrast, Apple’s margin, though respectable at 33.73%, has been subject to fluctuations, notably lower than its pre-pandemic peak. These figures reflect differing trajectories of top-line growth while revealing Microsoft’s robust profitability.
Source: Trive – Koyfin, Nkosilathi Dube
Microsoft’s significant investment of $10 billion into AI through OpenAI, coupled with the launch of Microsoft Copilot, underscores its commitment to leading the AI space. Meanwhile, Apple’s annual $1 billion investment reflects its determination to catch up with rivals like Google and Microsoft in AI development. These contrasting approaches highlight the companies’ differing strategies and priorities in the rapidly evolving tech landscape.
Summary
In recent years, Microsoft has surpassed Apple in market value, revenue growth, and profitability, showcasing its adaptability and innovative prowess in embracing new technologies. With its robust EBITDA margin and significant investments in AI, Microsoft appears poised to maintain its lead in the ever-evolving tech landscape.
Sources: Statista, Visual Capitalist, Koyfin, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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