Investors believed in “Apple Intelligence” – Apple’s value approached $4 trillion

Apple Corporation has come close to the historical mark of market capitalization of $4 trillion. Investors are optimistic about the company’s moves in artificial intelligence (AI), which are expected to revive sluggish iPhone sales.

Image source: Amin Zabardast / Unsplash

According to Reuters, Apple shares have risen about 16% since November, adding $500 billion to the company’s capitalization and allowing it to set a new market record, ahead of Nvidia and Microsoft. Maxim Group analyst Tom Forte noted in this regard: “Investors are encouraged by the development of artificial intelligence technologies, expecting that this will lead to iPhone update supercycles.”

Apple’s market value currently stands at about $3.85 trillion, which is more than the combined value of the major stock markets of Germany and Switzerland. At the same time, Apple was already the first American company to reach the previous trillion-dollar mark, and mainly thanks to “super cycles” of updates to its devices.

Despite this, the company has been criticized in recent years for being slow in developing an AI strategy, while giants such as Microsoft, Alphabet, Amazon and Meta✴ have made significant progress in this area. By comparison, Nvidia shares have risen more than 800% in two years, while Apple shares have only doubled over the same period. However, we do know that Apple began integrating OpenAI’s ChatGPT on its devices in December, following up on its June plans to introduce generative AI into branded apps, which will help change that.

At the same time, forecasts for Apple’s revenue growth in the first fiscal quarter remain subdued. The company expects revenue growth to be in the low to mid range (expected to be no higher than 6%) even during the holiday season, raising questions about the popularity of the iPhone 16 line. However, analysts expect iPhone sales to rebound in 2025. “While current iPhone demand remains low, this is due to limited availability of Apple Intelligence and geographic limitations. Expanding these capabilities will lead to increased demand,” said Morgan Stanley analyst Erik Woodring, calling Apple a “best investment idea” for 2025.

It is worth saying that the company may face problems associated with possible tariffs on goods from China if US President-elect Donald Trump follows through on his promises to impose tariffs of at least 10%. However, Woodring believes Apple will likely be able to get exceptions for products such as the iPhone, Mac and iPad, as it did in 2018.

Overall, as noted by other prominent analysts from CFRA Research and 50 Park Investments, “the technology sector has become seen by investors as an emerging defensive industry due to its revenue growth, and Apple’s approach to a $4 trillion market cap confirms its dominance in the sector and highlights its innovative potential.”