Historic moment: thanks to AI, Apple is already worth almost $4 trillion
24 December 2024 13:27
Apple is approaching a historic market capitalization of $4 trillion as investors bet on the development of artificial intelligence (AI). This was reported by "Komersant Ukrainian" with reference to Reuters.
The company has outpaced Nvidia and Microsoft in the race to this monumental milestone thanks to a stock price increase of about 16% since the beginning of November, adding about $500 billion to its market capitalization.
According to Tom Forte, an analyst at Maxim Group, Apple’s latest rally reflects
“investor enthusiasm for artificial intelligence and expectations that it will lead to a super cycle of iPhone updates.”
As of the last close of trading, Apple’s value was about $3.85 trillion, which is more than the total value of the major stock markets of Germany and Switzerland.
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Apple and artificial intelligence
The Silicon Valley firm, driven by the so-called iPhone supercycles, was the first American company to reach the previous trillion-dollar milestones.
However, in recent years, the company has been criticized for being slow to outline its AI strategy, while Microsoft, Alphabet, Amazon, and Meta Platforms have taken the lead in developing the technology.
In early December, Apple started integrating OpenAI’s ChatGPT into its devices after unveiling plans to integrate generative AI technology into its entire suite of applications in June.
Prospects and challenges
The company expects total revenue growth in the “low to mid-single digits” during the first fiscal quarter, a modest growth forecast for the holiday shopping season, which raises questions about the dynamics of the iPhone 16 series.
Nevertheless, according to LSEG, analysts expect iPhone revenues to recover in 2025. According to Eric Woodring, an analyst at Morgan Stanley,
“while current iPhone demand is still subdued…this is due to limited Apple Intelligence features and geographic availability, and as these are expanded, it will help drive improved iPhone demand.”
According to Adam Sarhan, CEO of 50 Park Investments,
“Apple’s approach to $4 trillion in market capitalization is a testament to its continued dominance in the technology sector. This milestone reinforces Apple’s position as a market leader and innovator.”
At the same time, Apple faces the risk of countervailing duties if US President-elect Donald Trump fulfills his promise to impose duties of at least 10% on goods from China. However, analysts believe that Apple is likely to receive exemptions for products such as iPhones, Macs, and iPads, similar to the first round of Chinese duties in 2018.
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