Microsoft Closes on Apple in Race for World's Most Valuable Listed Firm

A blowout first quarter has brought Microsoft back into contention in the race for the world's most-valuable listed company. From a report: The software behemoth is less than $60 billion away from dethroning Apple for the first time since May 2020, based on a 3.1% gain in early U.S. trading. That gives Microsoft a market value of $2.40 trillion compared with $2.46 trillion for Apple. The stock was boosted after Microsoft reported estimate-topping results for an 11th straight quarter. Several analysts raised their price targets, saying the earnings were very strong across the board.

Let's see if Elon

[etash]

Will be asking them to hold his beer given a year or two

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[timeOday]

It is interesting that no carmakers are up there, considering that's what people spend the most on, after housing.

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[Joey Vegetables]

Probably here in the U.S., but I doubt that is true in most of the world.

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[Opportunist]

Cars also have pretty high per-unit costs, along with selling probably a couple thousand units per design.

Software costs you at worst printing a sheet of paper per license (and even that is by now outsourced to your customer) and you sell a few millions.

Re:Let's see if Elon

[RobinH]

Takt time at a typical auto manufacturing plant in the US is in the 60 second range (smaller platforms can get down around 40 seconds) meaning the plant can produce one car every 60 seconds, three shifts a day. It's nothing for a high volume car part to need 300,000 parts per year, and that might only be supplying one plant, with some popular models being made in multiple plants. A single model can run for multiple years without a complete retooling. If you figure the average car lasts on average 12 years, and there's been more licensed vehicles on the road than licensed drivers since the early 2000's, and there are 227 million licensed drivers in the USA in 2018, then you're making roughly 19 million cars a year just for replacement in the USA alone (that's close enough to pre-pandemic sales being a little over 17 million per year). Now the US only makes around 8 million light vehicles per year itself, the rest are imported. But whatever... I don't know where you get the "couple thousand units per design."

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[Luthair]

Yep, which is why the tech company style valuations for Tesla are complete nonsense. The key part of tech companies is the ability to multiply your work for relatively low cost.

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[ceoyoyo]

This is why shysters focus on revenue. Look at how much money we made! You should invest!

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[scalptalc]

It is interesting that no carmakers are up there, considering that's what people spend the most on, after housing.

Wake up. Your car *is* housing. Or did you miss History? Don't worry, there'll be a remedial class very soon.

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[u19925]

Cars are commodity. If I have Honda and Toyota gives me discount, I will happily jump over and so would most (though not all) would do. On the other hand, you can do the same for MacOS to Windows to Linux. So the makers of MacOS and Windows can have net profit margin pretty high and can have huge marketshare. Cars have very low profit margin and hard to get high marketshare.

As we are seeing proprietary cars like Tesla like proprietary charging stations (have you Toyota only gas station?), auto-pilot feature

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[Junta]

Vehicles are relatively lower margin (they are priced high, but also cost quite a bit to produce) that the average household only buys about one a decade, and is on the front line for people to delay purchasing when there's an economic downturn.

Re: Let's see if Elon

[TuballoyThunder]

And yet they have employed more people and have made more of a contribution to society than you. Are they perfect--nope. Hopefully one day they will achieve the perfection that you evidently have reached.

Price/earnings ratio

[Joey Vegetables]

Current PE is around 38. Seems high to me.

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[amorsen]

What's that, a tad over 2.5% effective annual interest? Seems fair for a low-risk investment.

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[Joey Vegetables]

When inflation and interest rates were low, maybe.

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[fustakrakich]

Seems fair for a low-risk investment.

While the fed's spigot remains open, Wall Street is no-risk for big "investors". It's raining money!

Re:Price/earnings ratio

[MooseTick]

They are high compared to their peers, but not crazy out of line.

PE for:
Google: 32.23 Microsoft: 40.28
Apple: 29.24 Cisco: 22.47
Wal-Mart: 41.68 GE: 59.5
McDonalds: 26.5 Tesla: 340.19
eBay: 4.13 Ford: 18.6
Disney: 278.49 AT&T: 211.70

Current S&P 500 PE Ratio: 28.83

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[Joey Vegetables]

True, but the tech market, or even the market as a whole, may be overvalued, given the overwhelming likelihood of ongoing and significant inflation, and the subsequent necessary rise in interest rates.

Many people reading this don't remember the last time there was significant inflation in the U.S. (late 70s to mid 80s). It was not fun, nor was the aftermath. I'm expecting at least something similar in the near future, but probably worse.

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[fustakrakich]

... the market as a whole, may be overvalued...

"May be"? The market is being fattened to the tune of 120 billion every month. Calling it "overvalued" is the utmost in subtlety..

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[Joey Vegetables]

I agree. But we're in a lot of trouble once institutional investors start to understand this.

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[fustakrakich]

Whaddya mean, understand? They're milking it for every penny they can. I recommend everybody do the same, just know when to cash out. Or regular day trading is probably best, agricultural commodities, minerals, and maybe crypto too, what the hell?

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[bloodhawk]

It would be high if they weren't growing fast. for a growth company with a solid track record of consistent growth it is about right.

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[Joey Vegetables]

Neither Microsoft, nor most other publicly traded companies, have a solid track record of consistent growth in the kind of environment that results when law and order and free enterprise have all broken down, or in which hyperinflation, collapse of equity and bond markets, or total war are all very realistic possibilities.

This isn't a rant about Microsoft specifically. It's just that equity markets in general represent a huge risk right now. Some publicly traded companies will likely survive and thrive, j

The MacBook Pro release...

[Macdude]

The MacBook Pro release should boost Apple's stock price significantly in the next quarter. So Microsoft has closed the gap, but Apple is set to widen it again.

And at the end of the day, who really cares who's #1? They're both worth more than most country's GDP.

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[Junta]

I don't think that should have an effect on the stock.

For one, their macOS systems are a relatively small portion of their financial results.

To the extent the product would make a difference, it's not some surprise product, it's an update to their product line. Perceived company value from that should already be baked into the share price, including some anticipation for any expected revenue bump that may result.

More to the point, it's comparing apples and oranges. Microsoft's devices business is even small

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[bloodhawk]

Macbook pro will have little to no effect on share price, it just isn't a significant money spinner in the overall scheme of things.

That's inflation for you

[RogueWarrior65]

Meh. Microsoft hasn't had a new product idea in years (no, Windows 11 doesn't count).