Apple is nearing the historic $4 trillion valuation, driven by investor excitement over long-awaited artificial intelligence (AI) upgrades.
Growth in Apple's Stock Value
Apple’s stock has surged by 16% since early November, adding $500 billion to its market cap, putting it leagues ahead of companies like Nvidia and Microsoft. At $3.85 trillion, Apple's worth is higher than the combined value of Germany and Switzerland's entire stock markets. 'Artificial intelligence is the magic word here,' said Tom Forte of Maxim Group. However, Apple's slow approach to AI has raised questions among those wondering if the company is playing catch-up.
Apple's AI Strategy
In December, Apple finally rolled out OpenAI's ChatGPT integration into its devices, following its June announcement to infuse generative AI across its ecosystem. This comes after a lot of pressure to prove that Apple is more than just iPhones and AirPods. Analysts believe these upgrades could start a massive handset replacement cycle, with Morgan Stanley pointing to 2026 as a key year for service growth driven by AI.
Market Impact and Trade Risks
Apple's meteoric rise has pushed its price-to-earnings ratio to a three-year high of 33.5. Major investor Warren Buffett has sold shares over concerns of overvaluation. President Donald Trump has proposed a 10% tariff on goods from China, which could impact Apple. However, analysts believe exclusions for products like iPhones and Macs are likely, just as they were in 2018.
Despite some market risks, Apple continues to confidently progress towards a $4 trillion valuation, outpacing competitors amid rapid AI adoption.
