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Apple is on the verge of reaching a historic $4 trillion market capitalization, overtaking rivals Nvidia and Microsoft in the race to this monumental milestone. The tech giant’s stock has surged by approximately 16% since early November, adding an impressive $500 billion to its market value, now standing at around $3.85 trillion.
This remarkable rally in Apple’s stock price can be attributed to growing investor optimism about the company’s progress in artificial intelligence (AI) advancements, as well as the expectation that AI will drive a “supercycle” of iPhone upgrades. According to Tom Forte, an analyst at Maxim Group, the increase in Apple shares is also fueled by excitement about generative AI technologies, which are expected to rejuvenate iPhone sales, particularly as the company began integrating OpenAI’s ChatGPT into its devices in December.
While Apple was once criticized for its slow pace in AI development, with competitors like Microsoft, Alphabet, Amazon, and Meta Platforms taking the lead, the company is now catching up with significant moves in AI technology. In June, Apple unveiled plans to integrate AI across its app suite, a shift that analysts believe will drive further growth.
Despite these advancements, Apple’s revenue growth projections for its fiscal first quarter remain modest, with a forecast of “low- to mid-single digits.” Analysts also anticipate that iPhone demand will rebound in 2025, driven by the rollout of new Apple Intelligence features and expanded geographic availability.
Apple’s price-to-earnings (P/E) ratio has climbed to a near three-year high of 33.5, surpassing Microsoft’s 31.3 and Nvidia’s 31.7, according to LSEG data. However, some analysts, including Eric Clark from the Rational Dynamic Brands Fund, caution that while Apple’s stock may seem expensive now, it may not appear as overpriced in three years.
In the midst of its soaring stock price, Apple also faces risks from potential retaliatory tariffs if U.S. President-elect Donald Trump follows through on plans to impose a 10% tariff on Chinese imports. Still, analysts like Morgan Stanley’s Erik Woodring believe Apple will likely receive exemptions on key products like the iPhone, Mac, and iPad.
Despite a recent dip in Apple shares following a broader market selloff after the Federal Reserve’s forecast of slower rate cuts, many investors remain optimistic. With technology stocks seen as a “defensive sector” due to their earnings growth, Apple’s continued dominance in the tech industry has solidified its position as an innovator and market leader.
“Apple’s approach to $4 trillion market cap is a testament to its enduring dominance in the tech sector. This milestone reinforces Apple’s position as a market leader and innovator,” said Adam Sarhan, CEO of 50 Park Investments.
As Apple edges closer to its $4 trillion target, its influence on the technology landscape continues to grow, with strong AI integration and an iPhone resurgence on the horizon.
Sources By Agencies
