Apple and Microsoft are battling it out to be the most valuable in the S&P 500. Microsoft just took the title Monday But analysts already predict who will be the winner by year' end.
Powered by its aggressive push into AI, Microsoft's value is expected to surge 6.5% to $3.1 trillion in 12 months, based on analysts' 12-month price targets, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And if that happens, Microsoft stay higher than Apple as the most valuable S&P 500 company. Meanwhile, that's not the only shake-up at the top analysts expect in the world's most-important stock index.
Microsoft, based in Redmond, Wash., is poised to score from AI much like Apple rode the smartphone wave for more than 10 years, says Dan Ives of Wedbush. "We view this as Microsoft's 'iPhone Moment' with AI set to change the cloud growth trajectory in Redmond the next few years," Ives said.
And that will change the pecking order at the top.
The Battle For No. 1 In The S&P 500
The race to the S&P 500's most valuable stock is in full display.
Apple is lost the title Monday — barely. You need to go to three decimal points to see the difference between it and No. 1, as it's so close. Apple is valued at $3.04 trillion, marginally behind Microsoft at $3.11 trillion.
The two technology giants have been jockeying for pole position for years. Microsoft's value pulled ahead of Apple's most recently in late November 2021. But now Microsoft's investments in AI — while Apple has been milking the iPhone — are starting to pay off.
Apple's revenue in calendar 2023 is expected to fall 0.8% to $384.4 billion. On the other hand, Microsoft's is seen jumping more than 11% to $226.6 billion. And in 2024, revenue at Microsoft is expected to rise another 14.4%. Such growth is why analysts are betting Microsoft will claim No. 1.
Another Change In The S&P 500
Analysts are also betting on payments systems operator Visa to rise to No. 9 in the S&P 500. That's a bit of a surprise. It would mean Visa will snatch the spot from red-hot pharmaceutical, Eli Lilly. Eli Lilly is seeing victories for treatments for neurological diseases and obesity.
Visa's stock is predicted to jump 8.9% this year. And if that happens, it would give the company a market value of $581.1 billion. That would be enough to edge out Eli Lilly in the No. 9 position in the S&P 500. Eli Lilly's value is forecast to fall 3.3% in the next 12 months to $563 billion.
Of course, these are just projections. Anything can still happen. But when you see investors surprised if Microsoft regains the No. 1 position, just know analysts long expected that to occur.
Most Valuable S&P 500 Stocks
Microsoft expected to be No. 2 in 12 months
| Rank now | Expected rank in 12 months | Company | Ticker | Sector | Target 12-month market value ($ billions) |
|---|---|---|---|---|---|
| 1 | 2 | Microsoft | Information Technology | $3.10 | |
| 21 | Apple | Information Technology | $3.09 | ||
| 3 | 3 | Alphabet | Communication Services | $2.0 | |
| 4 | 4 | Amazon.com | Consumer Discretionary | $1.9 | |
| 5 | 5 | Nvidia | Information Technology | $1.6 | |
| 6 | 6 | Meta Platforms | Communication Services | $1.0 | |
| 7 | 7 | Berkshire Hathaway | Financials | $0.9 | |
| 8 | 8 | Tesla | Consumer Discretionary | $0.8 | |
| 9 | 10 | Eli Lilly | Health Care | $0.6 | |
| 10 | 9 | Visa | Financials | $0.6 |
