Cisco Systems, the world`s biggest maker of equipment that powers the Internet, on Thursday briefly topped computer software giant Microsoft as the world`s most valuable company.
The two companies are now locked in a dead heat for maintaining that title on an ongoing basis, but the trend is clearly in place. Shares of Microsoft are little changed from their August levels while shares of Cisco have surged.
Based on its intraday trading high, San Jose, Calif.-based Cisco had a stock market value of $575.93 billion on 7.296 billion shares outstanding and a stock price of 78 15/16. Cisco split its stock on a 2-for-1 basis on Thursday.
Microsoft`s market capitalization, based on its intraday high of 111 1/8 and 5.177 billion shares outstanding, was $575.29 billion.
Microsoft stock rose 8 1/8 to 111 3/8 in late trading on the Nasdaq after people familiar with the situation said that mediation talks in the landmark Microsoft antitrust case are nearing conclusion with the possibility of either a settlement or resumption of the trial.
At those prices, the difference in stock market values between the two firms was a scant $640 million, or 0.11%. But in late trading, Microsoft had regained its lead on Cisco with a stock market value of $576.59 billion.
Microsoft, along with chipmaker Intel Corp., were largely responsible for driving the personal computer age and clearly the PC isn`t going away. There are about 120 million PCs in the world, and the market is still strong.
But with the explosion of the World Wide Web and the Internet beginning in 1993, companies such as Cisco, Yahoo! Inc. and others have seen their stocks soar as companies, consumers and governments worldwide seek to modernize their networks and operations using the global network.
While profits for both Microsoft and Cisco continue to surge ahead, investors have in recent months afforded companies such as Cisco and database software firm Oracle higher price-to-earnings ratios amid optimism the torrid growth of the Internet will help to push those companies` earnings even higher.
On Wednesday, Cisco`s market value topped $500 billion, a first for a Silicon Valley company, and analysts have said that Cisco could -- if its growth continues -- become the first company ever to be valued at $1 trillion.
In November, Cisco topped Intel to become the most highly valued company in Silicon Valley. Analysts said then that it showed how the worlds of communications and high-tech are now colliding at near Internet speed.
Intel, along with other high-tech stalwarts such as Hewlett-Packard Co. are now moving quickly into faster-growing areas related to the Internet and telecommunications, such as Web-hosting, networking and wireless networking and communications.
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