Apple is on the brink of becoming the first company in history to surpass a $4 trillion market valuation, Fortune reports.
Apple's stock (AAPL) has nearly risen 40% in 2024. Before the markets opened on December 27, Apple's market capitalization stood at $3.92 trillion, leaving the company just a modest surge in stock value away from the unprecedented milestone. The growth is said to have been fueled largely by optimism surrounding Apple Intelligence and the continued strength of its iPhone upgrade cycles.
In a research note published on December 26, Wedbush analyst Daniel Ives said that Apple is entering a "golden era of growth" with its AI initiatives serving as a pivotal driver. Ives increased his price target for Apple's stock to $325, citing the company's ongoing efforts to embed artificial intelligence into its products. He emphasized that Apple's current AI strategy is likely underestimated by the market, adding that the development of hundreds of applications under the Apple Intelligence platform will provide "another growth catalyst along with catalyzing iPhone upgrades across the board over the next 12 to 18 months."
We believe Apple is heading into a multi-year AI-driven iPhone upgrade cycle that is still being underestimated by the Street. Rome wasn't built in a day and neither will Apple's AI strategy but the seeds of that strategy with Apple Intelligence are now forming and will transform the Apple consumer growth narrative over the coming years.
We estimate that with hundreds of apps in development around Apple Intelligence that in essence creates a new multi-billion annual Services revenue stream will be another growth catalyst along with catalyzing iPhone upgrades across the board over the next 12 to 18 months. We believe Apple is on pace to reach the $4 trillion market cap threshold and be the first member of this exclusive club.
JPMorgan analyst Samik Chatterjee also predicts sustained growth for Apple, driven by its ability to expand its installed base of devices, which surpassed two billion active units globally in 2023. Chatterjee pointed to "the transformation of the company to services" and the continued evolution of its product lineup as key factors in its success. He also highlighted Apple's focus on capital deployment, with the company consistently returning value to shareholders through dividends and stock buybacks, which have totaled hundreds of billions of dollars in recent years.
Apple's nearest competitors in terms of market capitalization, Microsoft and Nvidia, have also benefited from advancements in AI but trail behind with valuations of $3.26 trillion and $3.43 trillion, respectively. Both companies are investing heavily in their own AI platforms, with Nvidia's GPU technology playing a central role in powering generative AI applications. However, Apple's long-term advantage seemingly lies in its ability to control both hardware and software, potentially allowing it to deliver a superior user experience across its ecosystem.
