Apple briefly reached a $4 trillion market value, driven by strong iPhone 17 and iPhone Air sales, despite AI strategy concerns.
NEW YORK: Apple briefly surpassed $4 trillion in market value for the first time on Tuesday, becoming the third Big Tech company to achieve this milestone.
Robust demand for its latest iPhone models has alleviated fears regarding the company’s slow progress in artificial intelligence.
Its stock momentarily hit $269.89, giving Apple a $4.005 trillion valuation, before closing up 0.1% at a $3.992 trillion market capitalisation.
Apple shares have climbed about 13% since the new product launches on September 9, pushing the stock into positive territory for the first time this year.
“The iPhone accounts for over half of Apple’s profit and revenue and the more phones they can get into the hands of people, the more they can drive people into their ecosystem,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
Apple shares had faced pressure earlier this year due to concerns over tough competition in China and uncertainties around high U.S. tariffs.
The latest smartphones, including the iPhone 17 line-up and the iPhone Air, attracted customers from Beijing to Moscow within the first few weeks of launch.
Analysts said the iPhone Air’s slim design could help fend off rivals such as Samsung Electronics.
Early sales of the iPhone 17 outperformed its predecessor by 14% in the U.S. and China, according to data from research firm Counterpoint.
Brokerage Evercore ISI expects strong demand for Apple’s latest iPhones to help it surpass market expectations for the September quarter.
The firm also anticipates Apple will issue upbeat forecasts for the quarter ending in December.
Apple is the third company to reach the $4 trillion mark after Nvidia and Microsoft.
Nvidia currently leads with a market value of almost $5 trillion.
Apple’s cautious approach to AI had raised concerns it could miss out on the industry’s biggest growth catalyst in decades.
Recent reports indicate the company is losing several senior artificial intelligence executives to Meta.
Apple was slow to roll out its Apple Intelligence suite, including a ChatGPT integration.
An AI upgrade to its voice assistant Siri has been delayed until next year.
Apple has explored several tie-ups with Alphabet’s Gemini AI, Anthropic and OpenAI, according to reports.
“The lack of a well-understood artificial intelligence strategy is clearly one of the things that is an overhang for the stock,” Zaccarelli said.
He added that a successful AI integration could transform market perception of the company.
Apple reported its strongest quarterly results in years during the April-June period.
The company achieved double-digit growth across key segments with better-than-expected forecasts.
Apple is scheduled to announce its fourth-quarter results on October 30.
The iPhone maker’s shares recently traded at 33 times earnings projected for the next 12 months.
This valuation is higher than the 27 price-to-earnings ratio for the Nasdaq 100 index.
Apple shares have gained 7% this year, significantly underperforming the tech-heavy Nasdaq’s 23% gain.
ALSO READ: US judge decertifies Apple app store class action lawsuit
