NEW YORK (CNN/Money) -
The battle for world's most-valuable company shifted this week as Microsoft overtook General Electric as the No. 1 firm by market capitalization.
Microsoft's (MSFT: up $1.03 to $55.25, Research, Estimates) gain Friday pushed its market value above $299 billion, topping the $295 billion of General Electric. (GE: down $0.15 to $29.70, Research, Estimates)
The two companies have traded places over the last four years except for a brief stint in early 2000 when Cisco Systems (CSCO: Research, Estimates) led in market value.
Microsoft's latest trip to the top is no major triumph; its shares are down 16 percent year-to-date. But GE has fared worse. Its stock is off 26 percent in 2002 as investors fret the acquisition-hungry company's complicated financial reports overstated profits.
"It's a company that has made a lot of acquisitions," said Donald Selkin, director of research at Joseph Stevens, who owns GE shares. "It's being tainted by the Tyco and the acquisitions brush."
Microsoft, on the other hand, has benefited from rumors it's going to beat June-quarter profit numbers, due next month. Microsoft has declined to comment on those rumors, but it responded to the latest market-value shift.
"While growing shareholder value is important, Microsoft has never put undo emphasis on its market cap or fluctuations in market cap in relation to other companies," a spokeswoman said. "Microsoft is in a competitive industry, and the company's success can only be measured by the value its products continue to have for its customers."
GE made a similar statement.
"We are focused on delivering earnings growth," said David Frail, a GE spokesman, who said the company is on track for 17 percent to 18 percent profit growth this year.
Market capitalization, or the value of one share multiplied by the number of shares outstanding, is a kind of barometer of investor sentiment. Microsoft has 5.415 billion shares outstanding, company figures show. GE has 9.937 billion.
But neither Microsoft nor GE is able to top Wal-Mart (WMT: Research, Estimates) in key financial benchmarks. The retailer is No. 1 in annual sales -- nearly $220 billion -- and leads all companies in payroll. More than 1.3 million people work for Wal-Mart, according to the Fortune 500.