Apple Intelligence leveraged the company’s shares

Last Wednesday, after a few days of reaching third place on the list, Apple reaffirmed its position as the most valuable company in the world, surpassing Microsoft and regaining first place in the global market.

The feat was achieved mainly because of Apple’s advancement in the race in artificial intelligence (AI) technology, an area that has been the focus of intense competition between technology giants.

Read too:

Nvidia surpasses Apple and becomes the second most valuable company in the world
Apple Intelligence is the company’s new AI, launched at WWDC 2024

Apple Valuation and Growth Drivers

Apple (AAPL.O) shares rose nearly 4% to an all-time high of $215.04 per share. This raised the company’s market valuation to $3.29 trillion. In contrast, Microsoft’s (MSFT.O) market capitalization fell to $3.24 trillion, putting it behind the company for the first time in five months.

This appreciation in Apple shares occurred simultaneously with the record reached by the Nasdaq, heavily concentrated in technology, due to new signs of a slowdown in inflation.

One of the main drivers of this growth was Apple’s recent announcement during its annual developer conference. The company has unveiled a series of new AI-enabled features and software enhancements for its devices. One day after the announcement there was already a 7% increase in the company’s shares, which is why analysts believe that these news will boost iPhone sales even further.

At the conference, executives including CEO Tim Cook demonstrated how the Siri voice assistant will be able to interact more intelligently with messaging, email, calendars and third-party apps. “All those questions about Apple being behind in AI technology were answered at the Worldwide Developers Conference,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

Comparisons with rivals

Despite lagging behind competitors like Microsoft and Alphabet, which owns Google (GOOGL.O), in developing AI, Apple has begun to reverse this trend. Concerns about the company’s poor stock performance eased after the company beat market expectations for its quarterly results and forecast in May, as well as announcing a record $110 billion buyback plan.

So far in 2024, Apple shares are up about 12%. In comparison, Microsoft saw an increase of approximately 16%, while Alphabet almost 28%. AI chip leader Nvidia (NVDA.O), which briefly overtook Apple in market value last week, is up an impressive 154% this year. Nvidia’s last market valuation was $3.11 trillion.

Within the “Magnificent Seven” group, which includes the main technology companies, Apple was not the only one to face challenges. Tesla (TSLA.O) is the only other company in the group that has performed worse than the Apple company this year, with a drop of around 30% in its shares.

Apple’s resumption of its leadership position shows that the company still has ways to continue growing and overcome these challenges, mainly with innovation strategies and investment in AI. With new AI capabilities and a robust share repurchase plan, Apple is well positioned to maintain its dominance in the global technology market.

Source: Reuters