Apple is nearing a historic $4 trillion stock market valuation, driven by investor optimism over its advancements in artificial intelligence aimed at revitalizing stagnant iPhone sales.
The company has outpaced competitors Nvidia and Microsoft in the race to this milestone, thanks to a roughly 16% surge in shares since early November, adding about $500 billion to its market capitalization.
As of its last close, Apple is valued at approximately $3.85 trillion, surpassing the combined market capitalization of Germany and Switzerland’s main stock markets.
Apple, the first U.S. company to achieve previous trillion-dollar milestones, has historically relied on the so-called iPhone supercycles to drive growth. However, it has faced criticism in recent years for lagging behind rivals like Microsoft, Alphabet, Amazon, and Meta Platforms in the AI space. Nvidia, the clear leader in AI adoption, has seen its shares skyrocket over 800% in the past two years, compared to Apple’s near doubling over the same period.
Earlier this month, Apple began integrating OpenAI’s ChatGPT into its devices after announcing plans in June to embed generative AI across its suite of apps. While the company projects modest revenue growth of "low- to mid-single digits" for its fiscal first quarter—typically a peak period due to holiday sales—analysts anticipate iPhone revenues to rebound by 2025.
Apple's valuation surge has pushed 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, according to LSEG data.
Apple shares recently dipped amid a Wall Street selloff triggered by Federal Reserve projections of slower rate cuts next year. However, investors expect the broader trend of monetary easing to support technology stocks, which have been viewed as a defensive sector due to their earnings growth.