Apple is fueling the company’s long-awaited AI enhancements to restore sales of Slugging iPhones with a historic $4 trillion (about Rs 340,735,52 crore) stock market valuation (about Rs 340,735,52 crore) by investors.
The company is ahead of Nvidia and Microsoft in the game, thanks to a 16% increase in stock since early November, which has increased by about $500 billion (approximately Rs 42,59,194 crore).
Apple’s latest rally reflects “investor enthusiasm for artificial intelligence and expects that this will lead to a super loop of iPhone upgrades,” said Tom Forte, an analyst at Maxim Group, who has a rating of “Hold”.
Apple is valued at about $3.85 trillion (approximately Rs 327,959,620 crore), with Apple being short, the combined value of major stock markets in Germany and Switzerland as of the last closing price.
The Silicon Valley company powered by the so-called iPhone Supercycles is the first U.S. company to reach its previous trillion-dollar milestone.
The company has been criticized in recent years for the speed at which AI strategies are being developed, and Microsoft, Alphabet, Amazon and Meta platforms have already dominated emerging technologies ahead of schedule.
Stocks of NVIDIA, the largest AI beneficiary, have soared more than 800% in the past two years, while Apple’s stock has nearly doubled during the same period.
Apple began integrating Openai’s Chatgpt into its devices earlier in December after plans to integrate AI technology in its app suite in June.
The company expects overall revenue to increase “low to mid-digit” in its first quarter – a modest growth forecast for the holiday shopping season has raised questions about the momentum of the iPhone 16 series.
However, LSEG data shows that analysts expect iPhone revenue to rebound in 2025.
“Although the recent iPhone demand remains still…it is a function of Apple’s limited intelligence features and geographical availability, and as both expand, it will help improve iPhone demand,” Morgan Stanley analyst Erik Woodring said in a note.
According to LSEG, the recent surge in stock prices has raised Apple’s P/E ratio to a nearly three-year high of 33.5, compared with Microsoft’s 31.3, while Nvidia’s 31.3.
Warren Buffett’s Berkshire Hathaway has sold its top stake in Apple this year as the conglomerate retreats widely from stocks due to concerns about valuation.
“I doubt the stocks for three years don’t look as expensive as they are today,” said Eric Clark, portfolio manager of the Rational Dynamic Brand Fund, which owns stake in Apple.
If U.S. President-elect Donald Trump promises to tariffs on goods from China at least 10%, Apple will face the risk of retaliation for tariffs.
“We believe Apple will likely get exclusions on products like iPhone, Mac and iPad, similar to China’s first round of tariffs in 2018,” Woodlin said.
Apple’s stock fell last Wednesday amid the Fed’s forecast of slower declines next year, but investors expect a broad trend of monetary easing to support the stock market next year.
“Due to its revenue growth, investors see technology as a new form of defense sector,” said Sam Stovall, chief investment strategist at CFRA Research.
The Fed’s actions “could end up having a greater impact on other cyclical areas such as consumer discretion and finance, etc., and have less impact on technology.”
“Apple’s approach to the $4 trillion (approximately Rs 3,40,73,552 crore) market cap proves its lasting dominance in the technology sector. This milestone strengthens Apple’s position as a market leader and innovator,” said Adam Sarhan, CEO of 50 Park Investments.
©Thomson Reuters 2024
(This story has not been edited by Tech Word News’s staff and is automatically generated from the joint feed.)
