Apple ( AAPL 0.59% ) Currently, it holds the title of being the most valuable company globally, boasting a market capitalization of nearly $3.3 trillion. However, the stock of this tech behemoth has not performed as well as some of its counterparts in the tech industry this year.
Apple, in addition to Amazon , Nvidia , Microsoft , Alphabet , Meta Platforms , and Tesla , refers to the seven largest technology-focused companies that have significantly contributed to the recent upward trend in the stock market. These companies are commonly referred to as the ” Seven magnificent individuals It should be pointed out that certain companies like Nvidia, Meta, and Alphabet have outperformed the market in 2024 by achieving higher gains.
Nonetheless, it would not be unexpected for Apple’s stock to accelerate towards the end of 2024 and reach the significant milestone of a $4 trillion market capitalization, which is only 21% higher than its current value.
AI is expected to boost the sales of Apple.
Apple has not yet unveiled. machine intelligence Compared to competitors like Samsung and other Chinese manufacturers who have already embraced this trend, Apple has been slower in introducing AI-enabled features on its smartphones. This is expected to change next month with the release of the new iPhones, which will include Apple Intelligence, a suite of advanced AI capabilities.
In June of this year, the large technology company launched Apple Intelligence, emphasizing that this system will be fully incorporated into iOS 18, iPadOS 18, and macOS Sequoia. comes with a variety of artificial intelligence capabilities that create content This could initiate a new cycle of upgrades, motivating users with older devices to switch to the newest iPhones.
J.P. Morgan According to analyst Samik Chatterjee, the upcoming iPhone is expected to initiate a fresh upgrade trend that will extend past Apple’s 2025 iPhone lineup. The analyst predicts that Apple may experience a 10% rise in iPhone sales in fiscal year 2025, reaching 244 million units. Apple’s fiscal year 2025 is set to commence next month and align with the introduction of its artificial intelligence-equipped iPhones.
J.P. Morgan predicts that iPhone sales will increase to 268 million units in fiscal 2026, suggesting that the demand for upgrades will grow stronger with the upcoming lineup refresh next year. In addition, Apple investors can look forward to AI integration not only in iPhones but also in MacBooks through Apple Intelligence.
Apple could potentially see further growth opportunities by tapping into these markets. generative AI The PC market is projected to increase from 48 million units in 2024 to 205 million units in 2028. By incorporating Apple Intelligence into its Mac operating system, the company is well-positioned to benefit from this long-term growth trend.
This suggests that Apple might be entering a phase of growth that could lead to an increase in its stock value in the future. Analyzing recent sales figures from Apple’s main chip supplier suggests that the company could soon reach a market capitalization of $4 trillion.
A clear indicator that Apple is getting ready for a strong push of AI-powered iPhones.
The chips that drive Apple’s iPhones are produced by a large semiconductor foundry. The company called Taiwan Semiconductor Manufacturing. TSMC, which stands for Taiwan Semiconductor Manufacturing Company, is well-known. It has been reported that Apple is the biggest client of TSMC, contributing to 25% of its revenue last year. Apple is said to be among the companies that have reserved the entire supply of 3 nanometer (nm) chips from TSMC.
Apple’s upcoming iPhone 16 models will feature 3nm processors, leading to speculation that the company is increasing its chip orders from TSMC. Sources indicate that Apple may produce 10% more iPhone 16 units in 2024 compared to the iPhone 15 units manufactured in 2023. As a result, TSMC has seen a substantial 45% increase in revenue for July due to this development.
In July 2023, TSMC’s revenue decreased by nearly 5% compared to the previous year. While Apple may not have been the sole contributor to TSMC’s revenue growth during that period, being its biggest client suggests that Apple likely boosted chip orders to support the launch of its upcoming smartphone models.
It would be wise to consider this action, as the number of generative AI smartphones being shipped is predicted to skyrocket by 364% this year, reaching 234 million units. With Apple releasing AI-enabled iPhones in time for the holiday season, they may experience higher demand than anticipated. Consequently, Apple’s growth in the last half of 2024 could surpass what Wall Street is predicting.
Based on the opinions of 49 analysts who analyze Apple, the stock is expected to reach a median price of $250 within the next 12 months, representing a 16% increase from its current value. If Apple’s growth is boosted by artificial intelligence (AI), the stock could potentially surpass this target and reach $300 by 2024, making it the first company with a market value exceeding $4 trillion by the end of that year.
