Apple’s market value is close to $4 trillion, driven by advancements in AI and expectations for iPhone upgrades
AI integration and iPhone super cycle hype have driven shares up $500 billion since November, bringing Apple’s worth close to $4 trillion.
With investors applauding the company’s long-awaited Artificial Intelligence (AI) improvements to boost slow iPhone sales, Apple is reportedly approaching a record $4 trillion stock market valuation on Tuesday.
With a roughly 16% increase in shares since early November, the business has surpassed Nvidia in the quest to reach the historic milestone, increasing its market valuation by around $500 billion.
According to Maxim Group analyst Tom Forte, who has a “hold” recommendation, the most recent surge in Apple stock shows “investor enthusiasm for artificial intelligence and an expectation that it will result in a super cycle of iPhone upgrades.”
As of the latest close, Apple was valued at over $3.85 trillion, which is far more than the total value of the major stock markets in Germany and Switzerland.
According to the research, the Silicon Valley corporation was the first US company to reach prior trillion-dollar milestones, propelled by the so-called iPhone super cycles.
As Microsoft, Alphabet, Amazon, and Meta Platforms have jumped ahead to dominate the developing technology, the firm has been under fire in recent years for taking too long to develop its artificial intelligence strategy.
Nvidia’s stock, which is the largest benefactor of AI, has increased by almost 800% in the last two years, while Apple’s stock has nearly doubled in the same time frame.
With intentions to use generative AI technology throughout its app suite announced in June, Apple began incorporating OpenAI’s ChatGPT into its devices earlier in December.
Concerns over the momentum for the iPhone 16 series are raised by the company’s cautious growth prediction for the Christmas shopping season, which calls for overall sales to rise by “low- to mid-single digits” during the fiscal first quarter.
But according to LSEG statistics, experts predict that iPhone sales will increase in 2025.
Erik Woodring, an analyst at Morgan Stanley, reiterated Apple as the brokerage’s “top pick” for the 2025 iPhone market. He wrote in a note that “although near-term iPhone demand is still muted … it is a function of limited Apple Intelligence features and geographic availability, and as both broaden, it will help to drive an improvement in iPhone demand.”
According to LSEG statistics, Apple’s price-to-earnings ratio recently surged to a near three-year high of 33.5, while Microsoft’s and Nvidia’s ratios were 31.3 and 31.7, respectively.
As a result of worries over inflated values, Berkshire Hathaway, the company owned by Warren Buffett, sold shares of Apple, its largest asset, this year.
The portfolio manager of the Rational Dynamic Brands Fund, which owns Apple stock, Eric Clark, stated, “I fear the stock will not appear as costly in three years as it does now.”
If U.S. President-elect Donald Trump fulfills his pledge to impose tariffs of at least 10% on Chinese imports, Apple might get retaliatory taxes.
“We think Apple will probably receive exclusions on products like the iPhone, Mac, and iPad, much like the initial round of tariffs on China in 2018,” Woodring stated.
Following the Fed’s prediction of a slower pace of rate cuts in the upcoming year, Apple’s shares fell last Wednesday amid a selloff on Wall Street. However, investors anticipate that the overall trend of monetary easing will boost stock markets in the coming year.
“Investors have viewed technology as a new defensive sector due to its earnings growth,” stated Sam Stovall, CFRA Research’s chief investment analyst.
The Fed’s move “may ultimately have a greater impact on some of the other cyclical areas: consumer financials and discretionary spending, and less so on technology.”
The $4 trillion market capitalization of Apple is evidence of its continued supremacy in the technology industry. Apple’s leadership in the market and innovation are further cemented by this milestone, according to Adam Sarhan, CEO of 50 Park Investments.
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