Apple Set to Become First $4 Trillion Company

Apple is on the brink of becoming the first company in history to surpass a $4 trillion market valuation, Fortune reports.

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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.

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Top Rated Comments

McWetty Avatar
16 weeks ago

Half of Macrumor members…. "Apple are going downhill fast. Time Cook has destroyed this company"! ???

Well done Apple, Well done Tim. You have done well with my monthly paychecks.
I don’t disagree, but there’s more to a brand/company than how good they are at building revenue.

I love Apple products, but I do feel they have lost their soul a bit. Could just be me getting older though.
Score: 31 Votes (Like | Disagree)
steve09090 Avatar
16 weeks ago
Half of Macrumor members…. "Apple are going downhill fast. Time Cook has destroyed this company"! ???

Well done Apple, Well done Tim. You have done well with my monthly paychecks.
Score: 24 Votes (Like | Disagree)
Mrkevinfinnerty Avatar
16 weeks ago

This year, it is estimated Apple spent $32,000,000,000,000 on R&D. I think they’ve done a bit…
Last decade their R&D expenditure is less that $200 billion. Same period, they've spent nearly $700 billion on their own stock.

Clearly shows where the priorities are, shareholder value > product.
Score: 17 Votes (Like | Disagree)
WarmWinterHat Avatar
16 weeks ago

Apple is like Coach. They have a prestige brand even if the purses aren't well-made anymore and fall apart. So it's. Win-win unless you care about quality
The hardware is (mostly) fantastic. The software, however, is getting pretty sad, buggy and too-tied to and pushing towards services.
Score: 16 Votes (Like | Disagree)
Mrkevinfinnerty Avatar
16 weeks ago
What happens when you spend more on share buy backs than r&d
Score: 14 Votes (Like | Disagree)
citysnaps Avatar
16 weeks ago

Most investments indirectly profit by how Apple is doing so anyone who does investing should be happy.

On the other hand as consumers, we can't but feel bad about our Apple spending habits :(.
What's to feel bad about?
Score: 13 Votes (Like | Disagree)