May 26, 2010: In a massive milestone, Apple passes Microsoft to become the world’s most valuable technology company for the first time.
The changing of the guard proves particularly amazing given that, just 15 years earlier, Apple looked close to dead, while Microsoft dominated the tech world thanks to Windows 95.
Microsoft and Apple: Good friends, better enemies
Microsoft and Apple enjoyed one of the most fascinating (and, at times, infuriating) tech rivalries of the 1980s and ’90s. Apple co-founder Steve Jobs and Microsoft co-founder Bill Gates were both the same age, born in 1955. That made comparing their respective successes and failures interesting — particularly since their winning periods rarely coincided.
Microsoft first made a name for itself working as a Mac developer. When Jobs was booted out of Apple in 1985, then-Apple CEO John Sculley tried to secure future great software for the Mac by signing a deal with Gates to give Microsoft “non-exclusive, worldwide, royalty-free, perpetual, nontransferable license to use [parts of the Mac technology] in present and future software programs” in exchange for Microsoft continuing to develop for Apple.
How terrible was this lopsided deal? The full extent of the horribleness was revealed when Microsoft got its act together and started to make Windows competitive with Mac. This triggered a long-running lawsuit over whether Microsoft stole the Mac’s “look and feel.” (That legal battle ultimately went in Microsoft’s favor.)
While Macs ran circles around Wintel PCs, Windows machines cost less and ultimately became far more widely available. Although Apple was, at one time, a much more profitable company than Microsoft, by the mid-1990s, Apple was faltering thanks to disastrous decisions like “clone Macs.” Microsoft, on the other hand, rose to dominate the industry following Windows 95.
When Jobs returned to the failing Apple in 1997, an injection of cash from Microsoft helped save Cupertino from bankruptcy.
Apple passes Microsoft, becoming the world’s most valuable tech company
The tables quickly turned in the late 1990s. Starting in January 1998, Apple became profitable again. Meanwhile, Microsoft found itself the target of a long-running antitrust case. On December 30, 1999, Microsoft hit the height of its 1990s dominance, with an all-time share price high of $53.60. Less than a year later, its stock price fell more than 60% to $20.
Apple, on the other hand, continued to climb. Cupertino reinvented itself as a consumer tech company that happened to build computers. With the success of the iPod, iPhone and iTunes Music Store, by 2010 Apple generated twice as much revenue from mobile devices and music as from Macs.
Overall, personal computers still moved more units than smartphones. But by 2010, smartphone sales were growing at five times the pace of computers.
At the close of the bell on May 26, 2010, Apple had finally passed Microsoft in market value for the first time. Apple was valued at $222.12 billion against Microsoft’s $219.18 billion. Both clocked comparable revenue, but Microsoft held more cash on hand. (In 2010, Apple had “just” $23.1 billion in cash.)
Apple’s $1 trillion market cap and beyond
In May 2010, the only U.S. company valued more highly than Apple was Exxon Mobil, with a market capitalization of $278.64 billion. In 2018, Apple surpassed $1 trillion, becoming the first public company in history to do so. Microsoft eventually followed — less than a year later.
In early 2022, Apple briefly surged above a historic $3 trillion market cap, before falling back to earth. The company is now creeping back toward that lofty valuation. Meanwhile, Microsoft — fueled by Wall Street’s fascination with artificial intelligence and the company’s investments in OpenAI — surpassed Apple’s market cap in January 2024.
After many surges and pullbacks, Microsoft currently maintains that top slot as the world’s most valuable publicly traded company, followed by Nvidia and then Apple. Apple’s stock in particular has been hit by the ongoing threat of massive tariffs on iPhones and other products built in China and India.
What are your main memories of the Apple versus Microsoft conflict? And when did you buy (or sell) AAPL stock? Leave your comments below.
