Apple Nears $4 Trillion Valuation as Investors Capitalise on AI Growth
Apple is approaching a historic $4 trillion (approximately ₹3,40,73,552 crore) stock market valuation, fueled by investor optimism surrounding the company’s long-awaited AI advancements aimed at boosting sluggish iPhone sales.
Surpassing Nvidia and Microsoft, Apple has gained about 16 percent in its share price since early November, adding around $500 billion (roughly ₹42,59,194 crore) to its market capitalization.
The recent surge in Apple’s stock reflects “investor enthusiasm for artificial intelligence and the expectation that it will lead to a supercycle of iPhone upgrades,” according to Tom Forte, an analyst at Maxim Group, who holds a “hold” rating.
As of the last close, Apple is valued at around $3.85 trillion (approximately ₹3,27,95,962 crore), surpassing the combined value of the main stock markets of Germany and Switzerland.
Driven by iPhone supercycles, the Silicon Valley giant was the first U.S. company to reach previous trillion-dollar milestones.
In recent years, Apple has faced criticism for its slow approach in developing an artificial intelligence strategy, while competitors like Microsoft, Alphabet, Amazon, and Meta Platforms have taken the lead in dominating this emerging technology.
Nvidia, the largest beneficiary of the AI boom, has seen its shares rise over 800 percent in the past two years, while Apple’s shares have nearly doubled during the same period.
Earlier in December, Apple began integrating OpenAI’s ChatGPT into its devices after announcing plans in June to incorporate generative AI technology across its app suite. The company forecasts a modest revenue growth of “low- to mid-single digits” for its fiscal first quarter, raising questions about the momentum for the iPhone 16 series.
However, LSEG data indicates that analysts expect iPhone revenue to recover in 2025. “Although near-term iPhone demand is still subdued, it is due to limited Apple Intelligence features and geographic availability. As both expand, it will drive a recovery in iPhone demand,” said Morgan Stanley analyst Erik Woodring, who reaffirmed Apple as the brokerage’s “top pick” heading into 2025.
The recent surge in Apple’s shares has driven its price-to-earnings ratio to a near three-year high of 33.5, compared to 31.3 for Microsoft and 31.7 for Nvidia, according to LSEG data. Warren Buffett’s Berkshire Hathaway has sold some of its Apple shares this year, as the conglomerate generally pulled back from equities due to concerns over high valuations. “I suspect the stock in three years will not look as expensive as it does today,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund, which holds Apple shares.
Apple also faces the potential risk of retaliatory tariffs if U.S. President-elect Donald Trump follows through on his promise to impose at least a 10 percent tariff on goods from China. “We believe it’s likely Apple will get exclusions on products like iPhone, Mac, and iPad, similar to the first round of China tariffs in 2018,” Woodring noted.
Apple’s shares fell last Wednesday following a Wall Street selloff after the Federal Reserve predicted a slower pace of rate cuts next year, but investors still expect broader monetary easing to support stock markets. “Technology has become a new form of a defensive sector due to its earnings growth,” said Sam Stovall, chief investment strategist at CFRA Research. He added that the Fed’s actions could impact cyclical sectors like consumer discretionary and financials more than technology.
“Apple’s approach to reaching a $4 trillion market cap underscores its lasting dominance in the tech sector. This milestone strengthens Apple’s position as a market leader and innovator,” said Adam Sarhan, CEO of 50 Park Investments.
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