Jan 15 Reuters Microsoft has eclipsed Apple to become the world39;s largest company by market capitalization, driven by its deep focus on generative artificial intelligence AI, a sector that has garnered increasing investor favour.

The tech giant, which along with Nvidia and Amazon placed a significant emphasis on AI, has experienced substantial market surges over the past year. Notably, Microsoft39;s market value has risen by over 1 trillion.

Analysts are drawing parallels between this shift and the early 2000s, when technology and internet companies began to replace consumer and financial firms at the forefront of the market39;s highest echelons.

According to LSEG data, Microsoft39;s market cap stood at 2.887 trillion, its highest ever, while Apple39;s market cap was 2.875 trillion as of Friday39;s close after peaking at 3.081 trillion on Dec. 14.

Microsoft has incorporated OpenAI39;s technology across its suite of productivity software, a move that helped spark a rebound in its cloudcomputing business in the JulySeptember quarter. Its AI lead has also created an opportunity to challenge Google39;s dominance of web search.

Apple, on the other hand, is facing challenges with waning demand, including for its flagship product, the iPhone.

The company is particularly struggling in China, a key market where economic recovery from the COVID19 pandemic has been sluggish and competition from a resurgent Huawei is intensifying, impacting its market share.

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