Microsoft overtook General Electric to become the world’s most valuable company by market capitalization in 1998.
Microsoft’s rise reflected the extraordinary commercial reach of Windows and Office during the personal-computer era. In the late 1990s, investors valued the company more highly than established industrial conglomerates because software could scale globally with comparatively low production costs.
Bill Gates and Paul Allen founded Microsoft in 1975. The company’s agreement to provide an operating system for IBM-compatible personal computers helped make MS-DOS and later Windows central to the PC industry.
This historical ranking is not the same as saying Microsoft was the largest company by sales, employees, or physical assets. Market capitalization measures investor expectations about future earnings and cash flows, so leadership can change even when a company’s operations remain strong.