In a thrilling Wall Street race, Microsoft crossed the $3 trillion valuation threshold, cementing its silver medal position behind Apple. Since the year’s dawn, these tech behemoths have engaged in a neck-and-neck duel for the top spot, with Microsoft even briefly snatching the crown in January.

Both companies have dominated headlines with their skyrocketing valuations, with Microsoft briefly claiming the crown earlier this year. This latest surge for Microsoft was fueled by a 1.7% jump in stock price, sending shares to a record high of $405.63. Apple remains close behind at $3.02 trillion, though their shares showed a more modest 0.3% increase.

Analysts attribute Microsoft’s success to its strong focus on generative AI, particularly its investment in OpenAI, the creators of ChatGPT. This cutting-edge technology is being integrated into Microsoft’s flagship products like Office and Bing, giving them a potential edge in the AI race against rivals like Google, Amazon, and Meta.

Apple, conversely, faces challenges with slowing iPhone sales, especially in China, where they’ve seen a year-over-year decline of 14%. They’ve even resorted to rare discounts to entice customers amidst fierce competition from local brands like Huawei. This lack of a clear “AI story” compared to Microsoft, coupled with iPhone concerns, dims their immediate path to the top.

The optimism surrounding Microsoft is reflected in analyst predictions. The median price target for Microsoft’s stock has now climbed to $425, up from $415 just a month ago, and the majority recommend “buy” as the best course of action.

However, both companies face a crucial test in the coming weeks as they report their financial results. Wall Street’s record highs could be challenged if these reports fail to impress. One thing’s clear: the battle for tech supremacy is far from over, and both Microsoft and Apple are determined to claim the spoils.