Apple Set to Become First $4 Trillion Company

[MacRumors]

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

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.

Article Link: Apple Set to Become First $4 Trillion Company

 

[steve09090]

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.

 

[Thymio]

This is nuts btw despite all the rationalizations that are made.

 

[heretiq]

This is nuts btw despite all the rationalizations that are made.

Care to elaborate?

 

[Plutonius]

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 .

 

[citysnaps]

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?

 

[JapanApple]

The sky is falling the sky is falling..............No it's not

 

[McWetty]

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.

 

[Mrkevinfinnerty]

What happens when you spend more on share buy backs than r&d

 

[victorvictoria]

It's just a number. Apple closes at $3.87 Trillion, and pundits like those morons on CNBC get all excited about the possibility of a big round number. In effect, Apple's market cap would increase a bit over 3% in that scenario. As a shareholder, I live for capital gains. As an Apple customer, I couldn't care less.

 

[green_diyos]

15.95 years ago on 20-Jan-2009 I had money to buy 4,000 $AAPL shares.

After a total of 28-for-1 Stock Splits today it would be 112,000 $AAPL shares.

At $259.02/share price that portfolio would be worth $29,010,240.00 or ₱1,685,610,895.03.

Last 4 Quarters Dividend was $100,800.00 or ₱5,851,021.84.

I think I'd retire comfortably in the Philippines if I cash out when Apple Inc hits $4 trillion or just enjoy the dividends in a country where over 4 of 5 adults made no more than $4,300 or ₱250,000 annually.

This did not occur because the eTrade documentation was intimidating even when my HS buddy who was into stocks for a decade was with me and I had parents & uncles who were financially literate.

Opportunity loss for at the time a late 20-something.

 

[Chungry]

All it cost them was their identity, what a bargain

 

[steve09090]

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.

Whilst there is nothing super exciting about many of their products now, they are still the first to bring out new markets, or at least they have a different approach on how it’s done.

I think the soul of Apple is absolutely there but the excitement isn’t.

 

[steve09090]

What happens when you spend more on share buy backs than r&d

This year, it is estimated Apple spent $32,000,000,000 on R&D. I think they’ve done a bit…

Edited. Can’t add up…

 

[Apple_Robert]

That is a lot of MR forum member money. lol

 

[Chungry]

Whilst there is nothing super exciting about many of their products now, they are still the first to bring out new markets, or at least they have a different approach on how it’s done.

I think the soul of Apple is absolutely there but the excitement isn’t.

Apple, typically, was not first but refined the story around technology and produced a best-of-breed experiences. This is why their AVP approach was fundamentally flawed. This is arguably where they are going wrong and floundering around. The lack of strong competition is making Apple lazy. The moment Apple realized it wasn't a scrappy underdog is the moment they lost the thread and started to drip-feed features and do goofy stuff like yearly cycles for hardware and software.

 

[citysnaps]

Apple manufacturing and selling outstanding products its 2 billion (active and repeat) customers love and want to purchase year after year -> outstanding Apple sales -> Apple's $4 Trillion valuation.

In summary... Apple's 2 billion happy customers have spoken. And that's what has lead to Apple's outstanding success and ultimately its valuation.

 

[Mrkevinfinnerty]

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.

 

[WarmWinterHat]

Shareholder here (personal investments plus 401k). I could not care less about Apple's market cap.

Additionally, they could use this extra money to pay dividends instead of stock-buybacks.

 

[Chungry]

Apple manufacturing and selling outstanding products its 2 billion (active and repeat) customers love and want to purchase year after year -> outstanding Apple sales -> Apple's $4 Trillion valuation.

In summary... Apple's 2 billion happy customers have spoken. And that's what has lead to Apple's outstanding success and ultimately its valuation.

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

 

[WarmWinterHat]

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.

 

[scrapesleon]

must be all those stock buy backs coming to play

 

[I7guy]

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.

Part of a ceos duty is to the shareholders. You don’t like the product, fine. But the market has spoken.

 

[Chungry]

The hardware is (mostly) fantastic. The software, however, is getting pretty sad, buggy and too-tied to and pushing towards services.

Exactly my point. Apple is about the marriage of software and hardware. At present the software is letting the hardware down (one only needs to look to the Mac and iPad for evidence of this). If you're new to the brand it's gotta be amazing. Those of us that have been with Apple since the late 90s see the slow but steady decline.

 

[Mrkevinfinnerty]

Part of a ceos duty is to the shareholders. You don’t like the product, fine. But the market has spoken.

Sure, he will leave a great share price behind i'm sure. As for product, not much beyond iPhone is there?