Apple’s AI Investments Bring It to Edge of $4 Trillion Valuation

Is Apple on the verge of becoming a $4 trillion company?

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As Reuters reported Monday (Dec. 23), the company has pulled in front of Nvidia and Microsoft in the race for this historic valuation. Apple’s shares have climbed 16% since earlier last month, adding around $500 billion to its market capitalization, the report said.

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The uptick reflects “investor enthusiasm for artificial intelligence and an expectation that it will result in a supercycle of iPhone upgrades,” said Tom Forte, an analyst at Maxim Group, which has a “hold” rating.

Apple was the first American company to reach past trillion-dollar landmarks, the report noted, driven by the strength of the iPhone “supercycles,” a term for a wave of consumers deciding to upgrade their phones at once, leading to a boom in sales.

According to the report, Apple expects overall revenue to grow by “low- to mid-single digits” during its fiscal first quarter — a moderate forecast for the holiday shopping season — leading to questions about the momentum for sales of the iPhone 16 model. Still, data from LSEG shows that analysts expect revenue from iPhones to recover next year.

“Although near-term iPhone demand is still muted … it is a function of limited Apple Intelligence features and geographic availability, and as both broaden, it will help to drive an improvement in iPhone demand,” Morgan Stanley analyst Erik Woodring said in a note, calling Apple the brokerage’s “top pick” heading into the new year.

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In other recent Apple news, artificial intelligence (AI) firm OpenAI last week launched more integrations of ChatGPT with desktop apps on Apple devices, saying these offerings will help users automate more of the work they perform on desktops.

“As our models get increasingly powerful, ChatGPT will more and more become agentic,” OpenAI Chief Product Officer Kevin Weil said in an OpenAI video summarizing news from Day 11 of the company’s 12 Days of OpenAI event. “That means we will go beyond just questions and answers; ChatGPT will begin doing things for you … ChatGPT will do more and more on your behalf.”

Meanwhile, Apple is looking for help in adding AI to its smartphones sold in China, with Reuters reporting that the company was in talks with two Chinese tech giants — Tencent and TikTok parent ByteDance — about integrating their artificial intelligence (AI) models into its products.

Apple began integrating OpenAI’s ChatGPT into its devices earlier this month, though the chatbot is not available in China. That’s left the company seeking a local partner at a time when its market share in China is slipping.