Microsoft is closing in on Apple's position as America's most valuable company, with only a $100 billion difference in market capitalization as of Thursday's closing. Microsoft's market value stood at $2.73 trillion, while Apple's was at $2.83 trillion. Both companies haven't had the best start to 2024, but Apple recently faced a significant setback due to a Barclays downgrade, leading to a loss of over $100 billion in market value in a single day.

Analysts have reduced their target price for Apple shares and expressed concerns about slow hardware sales, including tepid demand for the iPhone 15 in China. Apple's stock has declined by 6% since the beginning of 2024, whereas Microsoft has seen a 2% drop. The Fed's interest rate policies have impacted both companies, along with other major tech stocks.

This narrowing gap between Microsoft and Apple hasn't been seen since late 2021, when Microsoft briefly overtook Apple in market value. Economic slowdown concerns pose a risk to Apple, as consumers might reduce spending on high-priced items like iPhones and Macs. Apple also faces stiff competition in China, notably from Huawei's successful Mate 60 Pro smartphone launch.

In contrast, analysts are generally optimistic about Microsoft, partly due to its association with ChatGPT creator OpenAI and robust sales in its Azure cloud-computing division. This has contributed to Microsoft's stronger performance compared to Alphabet in 2023.