Microsoft Corp. is once again the most valuable company in the U.S., with the software heavyweight's market cap hitting $2.49 trillion and surpassing Apple Inc. for the first time in more than a year.
Microsoft's better-than-expected earnings report earlier this week was the latest catalyst that pushed the stock higher.
Meanwhile, Apple warned on Oct 28 that supply-chain disruptions are hindering iPhone and other product manufacturing. These issues are expected to bring increased challenges during the important holiday-shopping quarter.
Shares fell Friday even as the company logged a record 12-month profit nearing $100 billion.
Apple ended Friday with a market cap of about $2.46 trillion.
The last time Microsoft had a bigger market cap than Apple was July 2020, according to Dow Jones Market Data.
Many of the big tech giants like Microsoft have benefited from the sustained shift to working from home and remote schooling throughout the pandemic.
Microsoft's embrace of cloud computing, one of the fastest growth areas in tech, has also been a key driver to the company's bottom line.
Microsoft has a 20% share of the global cloud-computing market, making it the second-largest player in the industry, according to Gartner Inc. It trails only Amazon.com Inc., which has a more than 40% share.
Microsoft's last extended run as the world's most valuable company took place during the late 1990s and early 2000s, when its business mostly consisted of the Windows Operating system and its suite of Office software applications.
Its peak market cap during the tech bubble was $614.7 billion in December 1999.
Microsoft's recent growth harks back to that era. Its fiscal year that ended in June was its fourth straight year of double-digit revenue growth -- a feat not seen since fiscal 2004. And its annual operating margin passed the 40% mark for the first time since fiscal 2001.
Microsoft becoming the most valuable company in the U.S. speaks to the momentum the company is seeing in the arms race in the cloud space, said Dan Ives, managing director for Wedbush Securities.
He said Wall Street views the company out of a different growth lens today than it did a decade ago due to its cloud business.
"They've become the Tom Brady of tech stocks," Mr. Ives said. "The older they get, the better they get."
Microsoft's market cap topped $2 trillion in June after reaching the $1 trillion mark in April 2019.
By comparison, Apple passed $2 trillion in market cap in August 2020, becoming the first publicly listed U.S. company to do so. It passed $1 trillion in August 2018.
Microsoft and Apple are currently the only U.S. companies with market caps above $2 trillion.
