Apple, the Cupertino-based tech giant that brings iPhones and MacBooks, is on the verge of achieving a groundbreaking $4 trillion market valuation, driven by a surge in its stock price and growing optimism around its artificial intelligence (AI) initiatives, as reported by Forbes.
Shares Soar, Closing In On Milestone
Since November, under CEO Tim Cook, Apple's stock has climbed 16 per cent, adding approximately $500 billion to its market capitalisation and placing it ahead of rivals Nvidia and Microsoft in the race to this historic milestone.
As per Forbes, by the end of Monday’s trading session, Apple’s valuation reached $3.85 trillion, with shares closing at $255.27, up 0.31 per cent for the day.
Investors are particularly energised by Apple's advancements in AI and anticipated improvements to its iPhone lineup, fueling this rally.
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Pioneering Milestones In US Market
Apple has consistently set benchmarks in market valuation, becoming the first US company to hit the $1 trillion and $2 trillion marks. However, the tech giant has faced criticism for a perceived lag in its AI strategy compared to competitors like Microsoft, Alphabet, Amazon, and Meta, which have aggressively integrated AI technologies.
Notably, Nvidia's stock has surged over 800 per cent in the past two years, highlighting its dominance in the AI-powered chip market. Apple has recently sought to catch up by incorporating OpenAI’s ChatGPT into its devices, following a June announcement to embed generative AI into its ecosystem.
Mixed Signals For iPhone Sales
Apple projects modest revenue growth — between low- to mid-single digits — for the first fiscal quarter of 2025. While questions linger about the momentum for the upcoming iPhone 16 series, analysts predict a rebound in iPhone sales next year.
Morgan Stanley analyst Erik Woodring suggests that limited AI features and regional availability have dampened near-term iPhone demand. However, as these constraints ease, demand is expected to recover.
Meanwhile, Apple’s price-to-earnings ratio has surged to 33.5, its highest in nearly three years, surpassing comparable metrics for Microsoft (31.3) and Nvidia (31.7), according to LSEG data, as reported by Forbes.
China Import Tariff Could Become A Challenge
Despite the optimism, Apple faces potential headwinds. A proposed 10 per cent tariff on Chinese imports by US President-elect Donald Trump could impact the company, given its significant reliance on China for manufacturing and supply chains.
As Apple edges closer to making history, the company must navigate both opportunities in AI and external economic risks that could influence its path forward.