Apple Inc. is on the verge of achieving a $4 trillion market valuation, a record-breaking milestone in the tech industry.
The surge is fueled by investor confidence in the company’s push into artificial intelligence (AI) and hopes for a revival in iPhone sales.
Since November, Apple’s shares have climbed nearly 16%, adding $500 billion to its market capitalization.
Currently valued at $3.85 trillion, Apple far exceeds the combined stock market value of Germany and Switzerland, reaffirming its position as the world’s most valuable company.
This growth comes as Apple integrates generative AI technologies into its ecosystem, a move aimed at enhancing its product lineup and addressing critiques of its slow AI adoption compared to rivals like Microsoft, Nvidia, and Alphabet.
Analysts attribute Apple’s latest rally to expectations that AI-driven enhancements will kickstart a new iPhone supercycle.
Earlier this month, Apple began incorporating OpenAI’s ChatGPT into its devices, following its June announcement to embed generative AI across its apps.
While the holiday season forecast projects modest revenue growth, analysts predict a rebound in iPhone demand by 2025, as AI features become more widely available and geographically diverse.
Bullish outlook for Apple stock
Dan Ives, Global Head of Technology Research at Wedbush Securities, recently emphasized a strong bullish outlook for Apple during a CNBC discussion.
He highlighted the company’s potential to lead the consumer AI revolution, projecting the sale of 240 million iPhones in fiscal 2025.
According to Ives, this optimistic forecast is fueled by advancements in AI integration and Apple’s robust supply chain capabilities.
Ives’ analysis, based on supply chain checks in Asia, suggests that Apple could sell 5 to 10 million more iPhones than Wall Street expects, setting the stage for a strong holiday season.
This optimism is further driven by Apple’s AI strategy, which Ives believes could boost the company’s stock value by $30 to $40 per share.
While the consensus price target from other analysts is $255, Ives has set a much higher target of $300, reflecting his strong confidence in Apple’s growth potential.
Apple vs. Nvidia
Despite its dominance, Apple trails behind Nvidia as the leading AI beneficiary.
Nvidia’s stock has soared over 800% in the past two years, compared to Apple’s doubling during the same period.
Yet, Apple’s price-to-earnings (P/E) ratio recently hit a three-year high of 33.5, surpassing both Nvidia and Microsoft, signaling sustained investor optimism.
However, concerns about high valuations have led some major investors to reduce their stakes.
Warren Buffett’s Berkshire Hathaway, Apple’s top shareholder, has trimmed its holdings this year amid broader market caution.
Despite this, many analysts remain bullish on Apple’s long-term potential.
Apple faces geopolitical risks, including potential retaliatory tariffs under the incoming US administration.
However, analysts believe key products like the iPhone and MacBook are likely to receive tariff exemptions, as they did during the first round of China tariffs in 2018.
Macroeconomic factors also weigh on Apple’s outlook.
A recent Federal Reserve announcement about slower-than-expected rate cuts triggered a broader Wall Street selloff, including a dip in Apple shares.
Nonetheless, tech stocks, including Apple, are increasingly seen as defensive investments due to their consistent earnings growth.
The milestone highlights Apple’s ability to innovate and adapt, cementing its position as a global market leader.
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