Microsoft (MSFT) -) on Jan. 11 notched a new 52-week high, briefly unseating Apple (AAPL) -) as the world's most valuable company. Apple, which recently dropped below its $3 trillion market cap, has held the title steadily for the past year and a half, and on-and-off for the past 10 years.
This is the fourth time Microsoft has briefly overtaken Apple's market cap since 2018. The company's stock was bolstered powerfully by its investment into and incorporation of artificial intelligence technology throughout 2023, rising 57% for the year.
Shares of Apple, which rose only 48% last year, have been somewhat rocky on concerns over iPhone demand and a lack of an obvious AI strategy.
Related: Microsoft hits record high, overtakes Apple as world's most-valuable company
Wedbush Securities analyst Dan Ives thinks that there is room for more upside for both mega-caps; he has said that he expects Apple to reach a $4 trillion market cap by the end of 2024. He believes Microsoft will accomplish the same feat within the next 12 to 15 months.
The reason behind all the growth, to Ives, comes down to AI.
"The AI revolution, it's starting with Nvidia (NVDA) -), but what (Microsoft CEO Satya Nadella) is doing, he's transforming AI," Ives said.
He said in November that the monetization opportunity presented by Microsoft's AI-powered copilot will be a game changer for the company throughout 2024.
Microsoft is a top investor in OpenAI, the startup behind ChatGPT. Microsoft has poured $13 billion into the company and has worked to incorporate the technology into Microsoft's own suite of products.
The stock is one of Wedbush's top picks for the year.
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The Bull Case for Apple
Still, Ives prefers Apple.
"I still believe Apple is the better stock because I think there's a renaissance of growth happening in Cupertino," he told CNBC. "But what this really speaks to ... the monetization of AI, it's here and it's really starting with Microsoft."
Ives, who is the most bullish analyst on Apple, with a price target of $250, above the average of $203, expects iPhone deliveries to be better than expected for the year.
And he doesn't expect the company to be behind in AI for long.
"I believe in 2024, they will buy an AI player," Ives said. "They play chess, others play checkers."
Apple, according to reports, is busy developing its answer to ChatGPT: Ajax. Deepwater Management's Gene Munster expects the company to reveal its AI progress at its developer conference in June, and he expects the anticipated AI-powered Siri to give Apple a huge advantage over the competition, even if it does come late to the party.
Shares of Microsoft lifted 0.8% Friday morning, while shares of Apple remained relatively flat.
Contact Ian with AI stories via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.
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