Apple closes in on record $4 trillion market cap with AI boost

Apple is closing in on a historic $4-trillion stock market valuation, powered by investors cheering progress in the company's long-awaited AI enhancements to rejuvenate sluggish iPhone sales.

The company has pulled ahead of Nvidia and Microsoft in the race to the monumental milestone, thanks to an about 16% jump in shares since early Nov that has added about $500 billion to its market cap. The latest rally in Apple shares 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.

Valued at about $3.85 trillion as of the last close, Apple dwarfs the combined value of Germany and Switzerland's main stock markets. The Silicon Valley firm, driven by the so-called iPhone supercycles, was the first US company to hit previous trillion-dollar milestones.

In recent years, the company has attracted criticism for being slow to map out its AI strategy, while Microsoft, Alphabet, Amazon and Meta Platforms have pulled ahead to dominate the emerging technology.

Shares of Nvidia, the biggest AI beneficiary, have surged more than 800% over the past two years, compared to the near doubling in shares of Apple during the same period. Apple earlier in Dec started integrating ChatGPT into its devices after unveiling plans in June to integrate generative AI across its app suite. The recent surge in shares has pushed Apple's price-to-earnings ratio to a near three-year high of 33.5, compared to 31.3 for Microsoft and 31.7 for Nvidia.

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