Microsoft has overtaken Apple as the world’s most valuable company, as the iPhone maker’s stock price continues to plunge.
Apple surpassed Microsoft in June after the two tech giants jockeyed for the top spot earlier last year, thanks to surges in their market capitalization values. In June, Apple’s market cap was $3.29 trillion to Microsoft’s $3.24 trillion.
But it has been a different story for Microsoft, Apple and other tech companies for the past week. President Donald Trump’s announcement of broad tariffs on all imported goods, with heavier rates levied on certain countries, has wiped out trillions of dollars in market value.
Market cap measures the size and value of a company traded on the stock market, multiplying the total number of shares by the stock price.
Tech is among the industries hit hardest, with share prices for Apple, Microsoft and others tumbling since Trump’s tariff announcement last week. Apple had lost an eye-popping $773 billion in value since the announcement, a 23% plummet, as markets closed Tuesday. Microsoft was down $200 billion.
Share prices and market cap value for both companies fluctuated Tuesday thanks to a mini-rally in the morning followed by losses through the rest of the day. After China retaliated last week with trade restrictions, Trump said he would impose an additional 50% rate to tariffs against China starting at 9:01 p.m. Pacific time Tuesday. That would bring the total tariff imposed on Chinese goods to 104%.
Microsoft’s market cap ultimately hit $2.64 trillion to Apple’s $2.59 trillion when the markets closed Tuesday.
As global companies, both Microsoft and Apple are exposed to rifts in trade, but Apple is especially vulnerable because most of its products are built overseas. As a consequence, it’s taken the biggest hit among the Magnificent Seven stocks — Google parent Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
“A bunch of people have exposure to this through their 401(k) accounts,” said Philip Bond, a finance professor at the University of Washington. “I’m guessing that’s especially true in Seattle, since high-income earners are more likely to have 401(k)s.”
Microsoft has had the least severe drop among tech companies that have a market cap above $200 billion, with Google a close second. Almost all of Microsoft’s revenue comes from cloud-computing and software services.
Tesla has fared almost as poorly as Apple, with a nearly 22% plunge since Trump’s “Liberation Day” announcement.
As losses piled up earlier this week, some in the finance world warned that increased inflation and a possible recession could be the consequences of Trump’s tariffs.
JPMorgan Chase CEO Jamie Dimon said in an annual letter to shareholders on Monday that the recent tariffs “will likely increase inflation and are causing many to consider a greater probability of a recession.” Goldman Sachs raised the risk of a recession from 35% to 45% on Monday.
“It’s always tempting to think the stock market is moving around randomly but it really does tend to forecast the future,” Bond said. “The fact that it’s down so much, people should take that seriously.”
When the stock market is down it’s generally bad for the economy, he added.
Behemoths like Apple and Microsoft don’t have to count on the stock market to finance hiring and other investments, like smaller and leaner companies might. The tech giants generate piles of cash each quarter that they can rely on; Microsoft and Apple reported $88.1 billion and $93.7 billion in profit during their most recent fiscal years.
But the stock market is sending clear signals about how it views the future profits of these companies, according to Bond.
And for smaller companies that depend on investors to grow, a weak market could spell trouble. Less hiring, fewer investments and ambitious projects going by the wayside.
“The stock market isn’t the economy,” Bond said. “But they do sort of go together.”
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