In the perpetual game of corporate one-upmanship, Microsoft is slyly inching towards dethroning Apple as the world's most valuable company.

How? Well, it all follows a recent stumble in tech giant Apple's stock prompted by anxiety over iPhone sales. A familiar tale? Microsoft, increasingly benefiting from its cloud and corporate business, seems to think so.

Stock Dances and Market Jousts

Apple's shares have taken a 4% dip in 2024 after a triumphant 48% surge last year. In stark contrast, Microsoft’s stocks are on the rise, up 2% this year after an even more impressive 57% surge in 2023. On Wednesday, Apple's shares wobbled by 0.4%, Microsoft rose by 1.6%, narrowing the valuation gap between the two tech behemoths. Apple’s market value currently hovers at $2.866 trillion, with Microsoft hot on its trail at $2.837 trillion.

China's iPhone Woes and Corporate Thrusts

China poses a headache for Apple as iPhone sales plummeted by 30% in early 2024, hinting at fierce competition from alternatives including Huawei. Meanwhile, Apple preps for the grand reveal of its Vision Pro mixed-reality headset on February 2, with Microsoft observing closely. A report from UBS, however, predicts that the device’s impact on Apple’s earnings per share will be “relatively immaterial” in 2024.

A Recurring Rivalry

Microsoft has teased Apple before, briefly snatching the title of the most valuable company in 2021 amid Coronavirus supply chain disruptions. The question lingers: can history repeat itself?

Pricing Peaks and Expectation Games

Both tech giants play the pricing game, with Apple's forward PE at 28, soaring above its 10-year average of 19. Microsoft, not to be outdone, trades around 31 times forward earnings, surpassing its 10-year average of 24. A risky gamble? Perhaps, but in the high-stakes world of tech, these titans play for keeps.

Revenue Reports and Crystal Balls

Apple's recent sales forecast for the holiday quarter fell short of Wall Street’s expectations, predicting a meager 0.7% revenue increase to $117.9 billion. On the flip side, analysts predict a robust 16% revenue boost for Microsoft, reaching $61.1 billion, driven by relentless growth in its cloud business. As the corporate saga unfolds, stay tuned for the climax when both giants unveil their financial cards in the coming weeks.

This news comes not long after Apple’s CEO Tim Cook revealed that he hopes to remain in post for some time yet.