Apple is on the verge of reaching a historic milestone in the history of global finance. The Cupertino giant is set to become the first company to reach a market valuation of $4 trillion, an exceptional performance that speaks to its continued dominance in the technology market. With AAPL stock soaring nearly 40% in 2024, let’s analyze the factors that are propelling Apple to this new high.
Growth driven by AI and services
Apple’s valuation, which currently stands at around $3.92 trillion, owes much to investor optimism about its artificial intelligence strategy. Daniel Ives, analyst at Wedbush, even speaks of a “golden era of growth” which is dawning for the company. He also revised his price target upwards to $325, citing in particular the development of the Apple Intelligence platform.
“We estimate that the hundreds of applications in development around Apple Intelligence will create a new revenue stream of several billion dollars annually in Services,” explains the analyst. This new revenue stream is also expected to boost iPhone renewal cycles over the next 12 to 18 months.
A considerable lead over its competitors
Microsoft and Nvidia, Apple’s closest rivals in terms of market capitalization, boast valuations of $3.260 billion and $3.43 trillion, respectively. Although these companies are investing heavily in AI, including Nvidia’s GPU technology playing a central role in generative AI applications, Apple retains a major strategic advantage: its ability to control both hardware and software. of its ecosystem.
JPMorgan analyst Samik Chatterjee also points to other growth drivers for Apple, including the continued expansion of its installed device base, which surpassed two billion active units worldwide in 2023. The gradual transformation of the company towards services and its policy of redistribution to shareholders, via dividends and share buybacks, also contribute to strengthening investor confidence.
This progression towards $4,000 billion in capitalization confirms Apple’s long-term strategy, which has been able to diversify its revenues beyond the iPhone while maintaining its leadership in technological innovation. The gradual integration of AI into its products and services could well mark the start of a new multi-year growth cycle for the Cupertino company. At least that’s what investors think.
