Apple is nearing a landmark stock market valuation of $4 trillion (approximately Rs. 3,40,73,552 crore), with investors expressing optimism over the company’s anticipated artificial intelligence advancements aimed at boosting its sluggish iPhone sales.
The tech giant has taken the lead over rivals Nvidia and Microsoft in reaching this significant threshold, following a roughly 16 percent increase in its stock price since early November. This surge has propelled Apple’s market capitalization by approximately $500 billion (about Rs. 42,59,194 crore).
“Investor enthusiasm for artificial intelligence and the anticipation of a supercycle of iPhone upgrades” underpin the latest increase in Apple shares, according to Tom Forte, an analyst at Maxim Group, who maintains a “hold” rating on the stock.
As of the latest close, Apple is valued at approximately $3.85 trillion (around Rs. 3,27,95,962 crore), significantly exceeding the combined market value of Germany and Switzerland’s primary stock exchanges.
The Silicon Valley powerhouse, known for its iPhone supercycles, was the first U.S. company to reach earlier trillion-dollar valuations.
In recent years, Apple has faced scrutiny for its slow progression in defining its artificial intelligence strategy. Meanwhile, other tech giants such as Microsoft, Alphabet, Amazon, and Meta Platforms have taken the lead in the rapidly evolving technology space.
During the past two years, Nvidia—widely regarded as a key benefactor in the AI domain—has seen its share prices soar over 800 percent, while Apple’s stock has nearly doubled in value in the same timeframe.
Earlier this month, Apple initiated the integration of OpenAI’s ChatGPT into its devices, following its announcement in June to incorporate generative AI technology into its application suite.
Looking ahead, the company projects an overall revenue increase of “low- to mid-single digits” in its fiscal first quarter, which raises questions about the sales performance of the forthcoming iPhone 16 series during the key holiday season.
Nonetheless, analysts expect a rebound in iPhone revenue by 2025, according to data from LSEG.
Erik Woodring, a Morgan Stanley analyst, noted, “Despite the current muted demand for iPhones, it stems from limited Apple Intelligence features and geographic availability. As these expand, we anticipate an uptick in iPhone demand,” reaffirming Apple as the firm’s top investment choice heading into 2025.
The recent rise in Apple shares has driven its price-to-earnings ratio to a nearly three-year high of 33.5, compared to 31.3 for Microsoft and 31.7 for Nvidia, as per LSEG data.
This year, Warren Buffett’s Berkshire Hathaway has sold portions of its Apple shares, which represent its top investment, citing broader concerns over inflated market valuations.
“I suspect that in three years, the stock will appear less expensive than it does today,” remarked Eric Clark, portfolio manager of the Rational Dynamic Brands Fund, which includes Apple shares in its holdings.
Apple also faces potential retaliatory tariffs should President-elect Donald Trump enact his proposed tariffs on imports from China, with industry analysts suggesting that Apple may receive exemptions for products like iPhones, Macs, and iPads, akin to the first round of tariffs imposed in 2018.
Last Wednesday, Apple’s shares declined amid a broader selloff on Wall Street, triggered by the Federal Reserve’s prediction of a slower pace of interest rate cuts in the upcoming year. However, investors remain hopeful that ongoing monetary easing will bolster stock market performance next year.
“Investors increasingly view technology as a new defensive sector because of its growth in earnings,” noted Sam Stovall, chief investment strategist at CFRA Research, adding that the Fed’s actions might influence cyclical sectors like consumer discretionary and financials more significantly than technology.
“Apple’s approach towards achieving a $4 trillion (approximately Rs. 3,40,73,552 crore) market cap is a testament to its sustained leadership in the technology sector. This milestone further cements Apple’s status as a market innovator and leader,” stated Adam Sarhan, CEO of 50 Park Investments.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
