Microsoft Catches Amazon as Second Most Valuable Company

By Douglas A. McIntyre Updated Jan 12, 12:32AM EST · Published Apr 25, 6:26AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Microsoft Catches Amazon as Second Most Valuable Company — © Thinkstock

Apple Inc. (NASDAQ: AAPL) is the most valuable company in America based on market cap and is unlikely to let go of that position in the foreseeable future. However, the race for second place has tightened as Microsoft Corp. (NASDAQ: MSFT) has caught up with Amazon.com Inc. (NASDAQ: AMZN).

Apple’s market cap is currently $854 billion. Microsoft and Amazon are within a percentage point of one another at around $723 billion. A critical difference between the two racing for the spot is that Microsoft’s stock has been just shy of flat in the past five days, while Amazon’s has dropped almost 6%.

The battle is based as much on the differences between the two companies as their similarities. Each has a large foothold in the cloud computing business, with Amazon Web Services in the lead and Microsoft’s suite of products among the top several companies vying to pass it.

Amazon’s core business remains e-commerce, both in the United States and abroad. It also has entered the streaming media service business and produces some of its own programs, a very expensive proposition. The Amazon membership program that includes media and free delivery services is called Prime and has 100 million members worldwide.

[nativounit]

Amazon’s e-commerce business continues to have low or no margins, a situation that has vexed some investors. Last year, Amazon North America had operating income of $2.9 billion on $106 billion in revenue. Amazon International lost $3.1 billion on revenue of $54 billion.

Microsoft continues to be a powerhouse in enterprise software, PC software and hardware that includes both tablets and its Xbox game system. While Amazon struggles in its core business, Microsoft makes money on all its major products and services.

While Wall Street considers lines of business beyond the cloud, it remains the focus because of the global size of the market and the margins in the sector. Amazon CEO Jeff Bezos has forecast that his cloud business will pass his e-commerce business in terms of revenue. That as much as anything may determine which company is worth more in the future.

[recirclink id=458043]

[wallst_email_signup]

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.