Microsoft has returned to its place as the most valuable company in the world, dethroning Apple this week to claim that title for itself. 

On Friday, Microsoft’s market capitalization was estimated to be $2.44 trillion after overcoming expectations with a strong earnings report for the fourth quarter this week. Apple, on the other hand, posted poorer-than-expected earnings, citing pressures on its supply chains from COVID-19 that cut into sales.

Microsoft’s ascent to the top of the heap can be credited to its ongoing focus on cloud computing solutions. Microsoft is considered the second-largest player in this area after Amazon, but it has continued to invest heavily in this emerging field.

Like other technology companies, Microsoft was able to adapt to the remote work environments prompted by the COVID-19 pandemic, limiting the potential damage to its operations. The company has postponed indefinitely its reopening plans, allowing employees to work from home for the near future.

Beyond cloud computing, Microsoft has seen its other business areas grow as well. Its social network, LinkedIn, saw an expansion in its sales by 42% in the third quarter as its user base grew to 800,000. Its licensing to other computer makers was also another growth area, posting a gain of 10%. Hardware sales were down due to COVID-19, but not enough to take away from ending this quarter strong.

These problems were more acutely felt by Apple. A global shortage of computer chips and a rise in COVID-19 cases in Asia that hurt the manufacturing of Apple products left a dent in the company's earnings. In contrast, Microsoft's CEO Satya Nadella highlighted the focus on the cloud as working against today’s inflationary tide.

“Digital technology is a deflationary force in an inflationary economy. Businesses – small and large – can improve productivity and the affordability of their products and services by building tech intensity,” said Nadella.

Being crowned the world’s most valuable company is not new terrain for Microsoft so much as it's a return to a position it held for years. It fell behind in the mid-2000s as the smartphone boom took off, pushing Apple toward becoming the first trillion-dollar company in August 2018

Microsoft broke that barrier in April 2019 and later it breached the $2 trillion mark in June 2021.