The race to a trillion dollar market capitalization came to an end in August when Apple cracked the 13-digit mark, but the tech giant soon slipped back behind the finish line and has since settled in the mid-800 millions.
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Statista aggregated financial data from sources including Alpha Knowledgebase, Morningstar, Wolfram, and Yahoo Finance to take a closer look at how the companies' valuations have changed in parallel over the past two years before converging in the last few months. Bottom line: Microsoft's market cap has stayed on a remarkably consistent overall incline, while Apple's peaks and valleys have sent its valuation back down to Earth.
Since the beginning of November, Apple's share price has dropped by more than 18 percent, lopping more than $200 billion off of its market cap. Analysts are chalking up the drop largely to disappointing sales of its new iPhone lineup, including the iPhone XS and iPhone XR.
The general plateau we're seeing in the smartphone market, which saw its fourth straight declining quarter in terms of unit sales, is also a factor. Microsoft's consistent growth over the past few years is due in large part to the successful shift to cloud services under Satya Nadella, bringing in a steadily increasing amount of recurring revenue.
Apple also has a growing services segment made up of iCloud and Apple Music, but the company doesn't provide cloud infrastructure or market its cloud hosting to the enterprise market, where the margins are a lot bigger. The business cloud market is still dominated by Amazon Web Services (AWS), but Microsoft Azure has been gaining market share and is well established as the second-biggest cloud provider ahead of Google Cloud Platform (GCP). Cloud isn't Microsoft's only growing segment, but it's the backbone of the company's revenue.
Market capitalizations can change rapidly for a whole host of reasons, so we expect Apple and Microsoft to keep up this game of leapfrog for a while.