Microsoft surpassed Apple to become the most valuable company in the United States with a market capitalisation of $753.3 billion. Apple Inc, which became the first US company to reach $1 trillion in August, saw its market cap slide to $746.8 billion due to lower iPhone sales amid reports of suppliers cutting costs and workforce. Amazon took the third position with $736.8 billion, whereas Google's parent Alphabet Inc came fourth with a market capitalisation of $725.5 billion.
When high flyers like Facebook and Google are facing questions over their data practices, investors are betting big on cloud and software services which are expected to remain strong on the back of demand from companies striving to increase productivity and efficiency, said an IANS report.
The last time Microsoft managed to come close to Apple's market cap was in 2010, but had been trailing behind the Cupertino tech giant ever since. The Satya Nadella-led software major reported 19 per cent increase in net income to $8.8 billion and 34 per cent rise in revenue at $29.1 billion in the financial results for the first quarter of 2019.
Microsoft saw revenue in Intelligent Cloud increase 24 per cent to $8.6 billion, while revenue from its Server products and Cloud services increased 28 per cent, driven by Azure's revenue growth of 76 per cent. Revenue in More Personal Computing was $10.7 billion and increased 15 per cent.
"We are off to a great start in fiscal 2019, a result of our innovation and the trust customers are placing in us to power their digital transformation," CEO Satya Nadella said in a statement.
On the other hand, slower-than-expected demand has reportedly led Apple to direct its top phone assemblers, Foxconn and Pegatron, to put a planned production boost for its iPhone XR on backburner. The iPhone XR is a relatively cost-effective model that was introduced into markets last month.
Foxconn, a Taiwan-based assembler for Apple, would cut its production 20-25 per cent from the original optimistic outlook and produce around 100,000 fewer units daily to reflect the new demand outlook, according to a report by Japanese financial paper Nikkei earlier this week.
The estimates of iPhone XR have been cut by nearly 30 million shipments, according to Apple analyst Ming Chi-Kuo. He said earlier this month that shipment forecast for the iPhone XR has been cut from 100 million units to 70 million units during the product lifecycle.
Edited by Vivek Punj