Microsoft on Thursday briefly became the most valuable company in the world, trading above Apple 's market capitalization for the first time since 2021. While we don't make investment decisions based on these kinds of milestones, it does highlight Wall Street's love of Microsoft and reticence toward Apple. Both stocks were big winners in 2023 – with Microsoft up 57% and Apple up 48%. But in the early stages of 2024, Microsoft has been able to add 1.5% while Apple has dropped more than 4%. Stock prices: Microsoft vs. Apple MSFT AAPL mountain 2022-12-30 Microsoft vs. Apple since the close on Dec. 30, 2022 In a Club commentary on Wednesday , we highlighted how only 57% of analysts have a buy-equivalent rating on Apple. According to FactSet, that's the first time below 60% since the first year of Covid in July 2020. Apple has been downgraded a bunch in the new year, with Barclays standing by the sell-equivalent rating and price target cut it issued on Jan. 2. The analysts reiterated their concerns about the iPhone 15 cycle and valuation. Another question mark is how Apple's new Vision Pro mixed reality headset will be received when it goes on sale on Feb. 2. Preorders for the device, with its whopping $3,500 starting price, open in the U.S. a week from Friday. We looked at the same FactSet data for Microsoft on Thursday and found the vast majority of analysts remain confident in the company: 90% have buy-equivalent ratings on the stock. The last time buy-equivalent ratings for Microsoft dropped below 80% was early 2018, according to FactSet. Wall Street has been gushing with Microsoft ratings bumps and price target hikes on prospects around artificial intelligence and the cloud. Investors have been excited about the recurring revenue opportunities from Microsoft's new AI assistant, Copilot, for its Office suite. Microsoft's cloud Azure has also been strong. Market caps: Microsoft vs. Apple To be sure, looking back over 10 years at the market cap race between the two stocks, Apple has been able to regain the crown shortly after Microsoft's past surges. More importantly, though, both companies' market values have been on a steady upward trajectory, reflecting their best-in-class quality. As Jim Cramer always says, Apple should be owned, not traded. While we did trim Apple after last year's rally, the sale was small to raise some cash and make sure the position didn't get too big in our portfolio. We also made a small sale in Microsoft after its 2023 outperformance. As part of those trades on Jan. 2, we put our 2 rating on those stocks, signaling to wait for a more substantial pullback before considering buying. Bottom line Apple is still our top holding at more than 5% weighting in our Club portfolio. Microsoft is around the middle of the pack of 33 stocks at a 2.6% weighting. We love both of these stocks for the long term and believe that they should be part of any well-diversified portfolio. If anything, a bet against either of these two companies in recent memory has been a fool's errand. (Jim Cramer's Charitable Trust is long AAPL, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
