Apple Inc. is closing in on a historic $4 trillion stock market valuation, driven by investors’ optimism about the company’s artificial intelligence (AI) enhancements and iPhone sales. The technology giant has surged 16% since early November, adding approximately $500 billion to its market capitalization, outpacing rivals Nvidia and Microsoft.
Analysts attribute Apple’s rally to investor enthusiasm for AI, which is expected to lead to a “supercycle” of iPhone upgrades. Tom Forte, an analyst at Maxim Group, notes that the company’s AI strategy has improved, but still lags behind competitors like Microsoft, Alphabet, Amazon, and Meta Platforms.
Apple’s shares have nearly doubled over the past two years, compared to Nvidia’s 800% surge. The company recently integrated OpenAI’s ChatGPT into its devices, aiming to enhance its app suite with generative AI technology.
While some analysts question Apple’s growth forecast for the holiday season, others believe the iPhone 16 series will drive revenue in 2025. Morgan Stanley analyst Erik Woodring reiterates Apple as his “top pick” heading into 2025.
However, concerns over valuations have prompted Warren Buffett’s Berkshire Hathaway to sell its shares of Apple this year. Analysts note that the stock price may become less expensive in three years if it does not meet investor expectations.
The Federal Reserve’s forecast of slower rate cuts next year has sparked concerns about retaliatory tariffs on goods from China, which could impact Apple’s exports. Despite these risks, analysts remain bullish on Apple’s dominance in the tech sector and its position as a market leader and innovator.
Source: https://www.reuters.com/technology/apple-approaches-4-trillion-valuation-investors-bet-ai-momentum-2024-12-23