Move over Apple, Microsoft now the world's most valuable company

Apple lost its crown as the world's most valuable public company to Microsoft on Friday, as the iPhone maker's shares fell about 2%.

Apple took a $6 billion hit to its sales during the fiscal fourth quarter due to persistent global supply chain problems, leading to a miss on Wall Street expectations. Top boss Tim Cook said the impact will be even worse in the current holiday sales quarter.

"Compared to less hardware focused FAANG (Facebook [Meta], Apple, Amazon, Netflix and Google [Alphabet]) peers, Apple is also a lot more exposed to supply chain disruption," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

Apple's shares dropped 1.8 percent to end the session at US$149.80, giving the company a market capitalisation of US$2.48 trillion (AU$3.3 trillion). By contrast, shares of Windows software maker Microsoft rose 2.2 percent to a record high of US$331.62, ending the session with a market capitalization of $2.49 trillion (AU$3.31 trillion).

Apple, which has repurchased US$421.7 billion worth of shares over the years, had announced a massive US$90 billion share buyback in April. As a result, the outstanding stock pool keeps shrinking, and the company ended its fiscal fourth quarter with 16.4 billion shares.

Microsoft's stock has surged 49 percent this year, with pandemic-induced demand for its cloud-based services driving sales. Shares of Apple have climbed 13 percent so far this year.

Apple's stock market value overtook Microsoft's in 2010 as the iPhone made it the world's premier consumer technology company. The companies have taken turns as Wall Street's most valuable business in recent years, with Apple holding the title since mid-2020.

Analysts say Apple has managed the supply chain issue well, but with Cook warning of more pressure, the door is open to a hit to its performance as the holiday season kicks in.

In contrast, Microsoft on Tuesday forecast a strong end to the calendar year. But it also warned that supply-chain woes will continue to dog key units, such as those producing its Surface laptops and Xbox gaming consoles.

(Reporting by Subrat Patnaik and Sruthi Shankar in Bengaluru; additional reporting by Caroline Valetkevitch in New York; Editing by Bernard Orr, Saumyadeb Chakrabarty, Maju Samuel and Sonya Hepinstall)