Apple nears $4 trillion valuation amid AI push and iPhone upgrade hopes

Technology giant and iPhone maker Apple is edging closer to an extraordinary milestone, with its market valuation nearing $4 trillion.

Investor confidence in the company’s artificial intelligence (AI) advancements and expectations of a new iPhone upgrade cycle have fuelled a 16% surge in its stock since November, adding $500 billion to its market capitalisation.

Currently valued at $3.86 trillion, Apple’s market cap surpasses the combined worth of the leading stock indices of Germany and Switzerland. The strong rally reflects the growing optimism about Apple’s evolving AI strategy and its potential to reinvigorate product demand.

APPLE’S AI PUSH
In December, Apple began incorporating OpenAI’s ChatGPT into its devices, part of its broader initiative to integrate generative AI into its app ecosystem—a strategy announced earlier in June. Analysts view this move as pivotal, particularly in addressing lackluster demand for the iPhone 16 series during the holiday season.

Speaking to news agency Reuters, Tom Forte, an analyst at Maxim Group, attributed the market’s enthusiasm to Apple’s AI progress and the possibility of a “supercycle” of iPhone upgrades.

Similarly, Morgan Stanley’s Erik Woodring forecasted a recovery in iPhone sales by 2025, driven by the expanded rollout of Apple’s AI features. Woodring reiterated Apple as Morgan Stanley’s top investment pick for the year ahead.

Despite these advancements, Apple’s immediate revenue growth for the fiscal first quarter is projected to remain modest.

Meanwhile, its price-to-earnings ratio has reached 33.5, the highest in nearly three years, eclipsing major tech competitors like Microsoft and Nvidia. This elevated valuation has sparked concerns over inflated stock prices, prompting Warren Buffett’s Berkshire Hathaway to reduce its Apple holdings.

Even with potential headwinds, such as the possibility of new tariffs on Chinese imports under the incoming U.S. administration, analysts remain optimistic. Past exemptions secured by Apple during prior tariff rounds provide hope for minimal disruptions.

Apple’s strategic push into AI and its resilience in navigating market challenges have positioned the tech giant as a leader in the sector. As the company inches closer to the historic $4 trillion valuation, it continues to captivate investor confidence and maintain its dominance in the global market