TLDR
- Microsoft has overtaken Apple as the world’s most valuable public company, with a market cap of $2.64 trillion vs Apple’s $2.59 trillion
- Apple’s stock dropped 23% over four days following President Trump’s tariff announcements
- Jim Cramer refutes reports that Microsoft is pulling back on data centers, saying it’s “not the right story”
- Microsoft shares lost 5.8% during Thursday and Friday, showing greater resilience than Apple’s 15.8% drop
- Analysts view Microsoft as more insulated from tariff impacts due to less reliance on manufacturing imports
Microsoft has reclaimed its position as the world’s most valuable public company, overtaking Apple after the iPhone maker suffered a dramatic four-day sell-off that erased nearly a quarter of its market value.
As of Wednesday, Microsoft’s market capitalization stands at $2.64 trillion, edging past Apple’s $2.59 trillion valuation. This shift comes after Apple’s stock plummeted 23% over a four-day period.
The tech sector has been under significant pressure since President Trump announced sweeping new tariffs. The tech-heavy Nasdaq Composite has dropped 13% following the news.
Apple’s steep decline is largely attributed to its heavy reliance on China for manufacturing. Other countries where Apple has production facilities, including India, Vietnam, and Brazil, are also facing higher tariff rates under the new policy.
Microsoft’s Tariff Resilience
In contrast to Apple’s woes, Microsoft has demonstrated greater resilience. During the Thursday and Friday selloff, Microsoft shares lost 5.8% of their value while Apple’s stock plunged 15.8%.
The software giant’s business model appears less vulnerable to tariff impacts because it isn’t as dependent on physical imports as hardware-focused companies like Apple.
Financial analysts have even described Microsoft as the “safest large-cap investment option” in the current market environment.
This isn’t the first time Microsoft has held the top spot. The company briefly claimed the title of most valuable company early last year before being overtaken by both Apple and Nvidia.
Nvidia currently holds the third position with a market capitalization of $2.35 trillion.
Jim Cramer Defends Microsoft’s AI Strategy
CNBC host Jim Cramer has strongly pushed back against reports suggesting Microsoft is scaling back its data center investments.
“Please do some work reporting. Please do some work,” Cramer urged on CNBC’s Squawk on the Street. “Microsoft is at odds with ChatGPT, which is OpenAI. And they are shipping a lot of the, of the actual data centers being made by OpenAI.”
Cramer insists that Microsoft isn’t pulling back on AI infrastructure. “It’s not being done by Microsoft. And I know this because I checked it on the chips every day,” he explained.
The CNBC personality emphasized that the narrative about Microsoft reducing its AI buildout is incorrect. “I wish people would stop with that story about Microsoft pulling back. Because it’s not right,” he stated.
The market turbulence extends beyond just tech giants. Cramer noted that small-cap stocks have been hit particularly hard, with the Russell index entering bear market territory after losing 10.7% on Thursday and Friday.
According to Cramer, this downward movement reflects multiple shrinking as investors adjust valuations in light of potential tariff impacts on corporate earnings.
“This is a multiple shrinking. We’re going to go to 16 times 26′ numbers. That’s how you have to figure it out,” he explained.
While technology and import-dependent sectors feel the pressure, Cramer suggested that money might flow toward homebuilder stocks as mortgage rates decline.
“Rates are coming down. And they’re coming down really hard, really fast. We should recognize that,” he noted.
Despite the market volatility, hedge funds continue to show strong interest in Microsoft. According to recent data, 317 hedge funds held positions in the company during Q4 2024, highlighting institutional confidence in its long-term prospects.
Microsoft’s relative stability during this period of market stress has reinforced its reputation as a defensive play during uncertain economic times.
As markets continue to digest the implications of the new tariff policy, Microsoft’s software-focused business model and AI investments appear to be providing a buffer against the worst of the selloff that has hammered its competitors.
