Downgrades to Apple's shares leaves another tech firm ready to become top U.S. public company (UPDATE)

UPDATE: Thursday morning, Microsoft caught and passed Apple. The latter is down $1.79 or .96% as of 10:24 am EST while Microsoft traded as high as $390.

Apple is the most valuable publicly traded U.S. company in the world with a valuation of $2.9 trillion. But recently Wall Street has not been very positive about Apple. On the first trading day of the New Year, Barclay's analyst Tim Long said that there was nothing compelling about the iPhone 16 series that would turn around what he sees as a downtrend in iPhone demand. As a result, he changed his rating on the company's stock to "Underweight" while dropping the price target from $161 to $160.

As ridiculous as that sounds, it's all a code used on Wall Street telling institutional traders to sell Apple. No one likes to say "sell" because Wall Street firms fear that doing so will upset the company-in this case Apple-and cost them business when Apple needs an investment banking firm to sell more shares or assist in a takeover. Piper Sandler followed with analyst Harsh Kumar reducing his rating on Apple to Neutral.

The hat trick was completed Wednesday morning when Redburn Atlantic’s James Cordwell also lowered Apple to Neutral but he kept his price target at $200. He cut his rating on Apple due to concerns about lower iPhone sales mixed with concerns about regulatory agencies in the U.S. and abroad going after the App Store. Since the start of the year, Apple's shares have declined 91 cents or .49% to $186.19.

The lack of analyst love for Apple has opened the door for Microsoft to surpass Apple as the most valuable publicly traded U.S. firm. Including the $7 that Microsoft tacked on to its stock price on Wednesday, Microsoft's shares have risen $9 or 2.41% since the beginning of the year. This rally has taken Microsoft's market capitalization (or stock price multiplied by the number of outstanding shares) to $2.84 trillion. Microsoft is worth approximately $600 million less than Apple and has the momentum it needs to topple Apple from its precarious position at the top of the valuation charts.

Over the last year, Microsoft's shares have risen $147 or 62.4% to $382.77. Apple's shares are up $52.70 or 39.5% over the last year and closed Wednesday at $186.19 in regular trading.