Microsoft’s stock market value ended a trading session higher than Apple’s for the first time since 2021 on Friday, making it the world’s most valuable company as worries about demand hit the iPhone maker’s shares.

Microsoft’s value reached an all-time high at $2.887 trillion, surpassing Apple, which stood at $2.875 trillion.

Apple’s shares dipped 3% in 2024 due to concerns about smartphone demand, contrasting with its 48% gain last year. Microsoft, up 3% this year, experienced a 57% surge in 2023, driven by investments in AI, particularly in ChatGPT by OpenAI.

Apple’s market value hit its peak at $3.081 trillion on Dec. 14. Microsoft, incorporating OpenAI’s tech in its software, saw a boost in its cloud business and aims to challenge Google’s search dominance with its AI lead.

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Apple is currently facing challenges with lower demand, especially for its flagship product, the iPhone. In China, a significant market, demand has declined due to the slow economic recovery from COVID-19, and competition from Huawei is impacting Apple’s market share.

Apple is gearing up for a major product launch with the Vision Pro mixed-reality headset on February 2 in the United States. Despite the anticipation, a recent UBS report suggests that the sales of Vision Pro may not significantly impact Apple’s earnings per share in 2024.

Over the past few years, Microsoft has occasionally surpassed Apple as the most valuable company, with the latest instance occurring in 2021. During that period, concerns about supply chain shortages related to the COVID-19 pandemic negatively affected Apple’s stock price.

Both Apple and Microsoft stocks are seen as pricey based on their expected earnings, a common method for valuing publicly traded companies. Apple’s forward Price-to-Earnings (PE) ratio is currently at 28, well above its 10-year average of 19. Microsoft is trading at around 32 times its forward earnings, exceeding its 10-year average of 24.

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In Apple’s recent quarterly report in November, the company provided a sales forecast for the holiday quarter that fell short of Wall Street expectations. This was primarily due to weak demand for iPads and wearables.

Analysts predict that Apple’s revenue for the December quarter will increase by 0.7% to $117.9 billion, marking its first year-on-year revenue growth in four quarters. Apple is set to report its results on Feb. 1.

For Microsoft, analysts anticipate a 16% increase in revenue to $61.1 billion in the upcoming report. This growth is attributed to the continued expansion of its cloud business.