Apple's stock surges more than 4%, propelling its market valuation to $3.31 trillion

Apple’s stock surged more than 4% on Wednesday, propelling its market valuation to $3.31 trillion.

In comparison, Microsoft’s shares climbed over 1%, achieving a $3.26 trillion valuation, while Nvidia’s shares soared approximately 4%, nearing a $3.1 trillion valuation.

The AI boom has significantly boosted these three mega-cap tech stocks. Apple is the latest to join the AI trend, unveiling “Apple Intelligence” at its WWDC event on Monday. Following this announcement, Apple’s shares have risen by 12%.

According to Dan Ives, these tech giants are now in a race to reach a $4 trillion valuation, which is anticipated to be achieved within the next year due to the ongoing adoption of AI technologies.

“The AI Revolution starts with Nvidia and in our view, the AI party is just getting started as it’s 9 pm in a party going till 4 am with the rest of the tech world now joining,” Ives remarked in a note on Wednesday.

A $4 trillion valuation would represent potential increases of 21% for Apple, 23% for Microsoft, and 29% for Nvidia.

For Apple, Ives highlighted a “holy AI grail” opportunity, leveraging its massive 1.5 billion installed base of smartphones, with about 270 million iPhones not having been upgraded in over four years.

“This will catalyse a long-awaited super cycle in Cupertino,” Ives said, referencing the new AI product features as a significant draw for consumers.

Ives also noted that Apple’s WWDC release of AI software will empower developers to create hundreds of AI-focused apps, effectively building a new AI App Store over the coming years. This would become a primary way for consumers to interact with generative AI.

“Taking this a step further, we believe eventually this will lead to a bundled subscription service for Apple around higher-end AI capabilities, which will be another major catalyst for the Services segment in the coming years,” Ives added.

However, Microsoft and Nvidia remain strong contenders in the race to $4 trillion.

“Nvidia and Microsoft are the first derivatives of the AI Revolution,” Ives said.

Main Image: Reuters