Apple is on the verge of achieving an unprecedented milestone: a $4 trillion stock market valuation. Buoyed by investor enthusiasm for artificial intelligence (AI) and hopes for an iPhone upgrade boom, the tech giant’s stock has risen 16% since November, adding $500 billion to its market capitalization.
Currently valued at $3.85 trillion, Apple’s market capitalization is already greater than the major German and Swiss stock indexes combined.
The rise reflects growing confidence in Apple’s slow but promising progress in AI. “Investor enthusiasm for artificial intelligence and expectations that it will lead to a supercycle of iPhone upgrades,” Maxim Group analyst Tom Forte summed up the current market sentiment.
Apple began integrating OpenAI’s ChatGPT into its devices in December, following an announcement in June that it would incorporate generative AI into its app ecosystem. The move is seen as an important step to revitalize demand for the iPhone, which had faced slowing momentum for the iPhone 16 series during the holiday season.
The company expects sales to rise slightly in the fiscal first quarter, but analysts including Morgan Stanley’s Eric Woodring expect iPhone sales to rebound by 2025. . That will help drive improved demand for the iPhone,” Woodring said, reaffirming Apple as Morgan Stanley’s top pick for 2025.
Apple’s price-to-earnings ratio is 33.5 times, the highest in nearly three years, outpacing tech companies such as Microsoft and Nvidia. The assessment comes amid widespread market concern over soaring stock prices, prompting Warren Buffett’s Berkshire Hathaway to reduce its stake in Apple.
But investors remain bullish on the tech giant’s resilience. “Technology is being viewed by investors as a new type of defensive sector because of its revenue growth,” said Sam Stovall, chief investment strategist at CFRA Research.
Despite its advantages, Apple faces potential challenges under the next U.S. administration, including retaliatory tariffs on Chinese imports. Analysts like Woodring are optimistic that Apple will secure exemptions for its products, as it did with the first round of tariffs in 2018.
