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The First $40 Trillion Company on the Horizon?

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As the Christmas season approaches, the global financial markets are buzzing with excitement, particularly in the United States where the stock market has been enjoying a noteworthy Christmas rallyOn December 23, tech giant Apple achieved a remarkable milestone, with its market capitalization soaring past an astonishing $3.85 trillionGiven the rapid pace of its growth, there is a strong possibility that Apple will become the first company in the world to enter the $4 trillion club by the end of this yearTo put this monumental market cap into perspective, it is nearly equivalent to the total market capitalization of major publicly traded companies from Germany and Switzerland combined, underscoring Apple's dominance in the global capital market.

On the same day, neighboring companies in the tech industry such as Nvidia, Broadcom, and AMD also saw their stock prices climb sharply, with increases of 3.7%, 5.5%, and 4.5% respectively

This wave of optimistic sentiment echoed across the Asia-Pacific markets as wellOn December 24, TSMC's stock price hit a record high, marking an impressive year-to-date increase of over 84%, looking poised for its best yearly performance in 25 yearsTSMC’s market capitalization too has crossed the $1 trillion mark. The surge in the AI sector continues to be a potent driving force behind the robust performance of US tech stocks this yearSo far, Apple has seen its stock price rise nearly 33%, while Nvidia’s stock price has bolted up by over 182%, and Broadcom's has risen over 108%. Among the larger tech giants, Google’s shares have climbed nearly 40%, Meta's have surged nearly 70%, Amazon’s stock increased by almost 50%, and Tesla's has seen an uptick of more than 73%.

Since early November, Apple has embarked on a new phase of rapid growth, accumulating an approximate increase of 16% in its stock price, adding around $500 billion to its market value in just over a month

Analyst Tom Forte from Maxim Group attributes this latest surge to a variety of influential factorsOne significant reason is the enthusiasm investors have for artificial intelligence—a sector that is at the forefront of technological advancementThey firmly believe that Apple is well-positioned to capitalize on developments in AIAnother contributing factor is the anticipation surrounding an impending major update of the iPhone, which, as Apple's flagship product, tends to generate considerable market excitement with each significant upgrade.


Despite criticisms that Apple has lagged behind other tech companies in forming its AI strategy, this iPhone-producing behemoth is making strides to catch upEarlier this month, Apple initiated the integration of OpenAI's ChatGPT into its devices, including the iPhone

Recently, reports have surfaced indicating that Apple is in talks with Tencent and ByteDance to incorporate their AI models into Apple’s iPhones sold in China.

Historically, the Christmas holiday season has served as a peak sales period for Apple's iPhoneAnalysts from the London Stock Exchange predict that Apple’s iPhone revenue will rebound in 2025. “As the availability and capabilities of Apple Intelligence expand, this will help to drive improvements in iPhone demand,” stated Morgan Stanley analyst Erik Woodring in a recent report.
There are growing concerns among market participants that, should Donald Trump be elected president again, he could impose at least a 10% tariff on goods imported from China, which may lead to retaliatory tariffs against Apple

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However, Woodring believes that Apple may receive exclusions from tariffs on products like the iPhone, Mac, and iPad, similar to the tariff exemptions given in 2018 during the first round of tariffs imposed by the U.Son China.

China remains a critical market for Apple's iPhone successThis year, Apple CEO Tim Cook made three visits to China, indicating his high regard for the Chinese marketAnalysts suggest that the purpose of Cook's recent visits was to facilitate the rollout of Apple’s AI solutions in ChinaDuring his visit last month, Cook remarked that the entry of Apple Intelligence into the Chinese market requires navigating through a series of regulatory approvals.

“We are working hard on this, and it involves a very specific regulatory process that we need to complete, and we hope to bring Apple Intelligence to consumers in China soon,” Cook noted during his visit in October.

Moreover, according to a recent independent study by the International Data Corporation (IDC), global smartphone sales are expected to rebound strongly in 2024 after experiencing a decline over the past two years. In the third quarter, demand for the iPhone started to recover, largely due to the price reductions of older models on third-party platforms and promotional campaigns for newly released models

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