Apple briefly traded at $4 trillion on Tuesday, making it the third tech giant to ever hit that enormous figure. The maker of iPhones’ stock price peaked at $269.89 during the day, sending its overall value above $4 trillion for the first time. By the close, the stock dipped slightly to $3.992 trillion, but it still represents a monumental turnaround for the company.
The major reason for this surge is straightforward – folks are purchasing a lot of the latest iPhones. Apple released the iPhone 17 series and the iPhone Air on September 9, and consumers from Beijing to Moscow flocked to purchase them during the initial few weeks. Since that release date, Apple’s stock has increased by around 13 percent. That is the initial time Apple’s stock has been on the rise this year after months of struggling.
iPhones Drive Everything Else
Chris Zaccarelli, who manages investments at Northlight Asset Management, explained why iPhones are so important. “The iPhone drives more than half of Apple’s profit and revenue,” he said. When more individuals purchase iPhones, they also buy other Apple products and services in the process. That is what the company refers to as its “ecosystem” – after you possess an iPhone, you’re likely to acquire an iPad, Apple Watch, or subscribe to Apple Music.
Last spring, Apple wasn’t doing well. Investors were concerned about the intense competition that Apple would face in China, a market of immense size for Apple. Investors were also concerned about high tariffs the U.S. imposed on imports from countries in Asia. Apple produces most of its products in India and China, so these tariffs were expensive for the company. Apple chose not to pass on those expenses to customers but simply absorbed them.
New Phone Design Conquers Competition
The iPhone Air’s slender look is assisting Apple in battling competition such as Samsung. Research conducted by Counterpoint indicated that initial sales of the iPhone 17 were 14 percent higher than the prior model both in the U.S. and China. That is significant since those are Apple’s two most significant markets.
Apple has joined the group of companies to hit $4 trillion, following Nvidia and Microsoft who arrived before it. Today, Nvidia is the most valuable at nearly $5 trillion. One factor inhibiting Apple is the belief that the company is lagging in artificial intelligence. Apple came late to introduce its Apple Intelligence features, and its AI upgrade for Siri was pushed to next year. Some older AI staff have quit Apple to join Meta.
Zaccarelli explained that if Apple were able to get AI right in a way that gets people excited, “you’d see a whole different company.” In spite of the AI fears, Apple posted solidly strong results between April and June with expansion in all the major categories of products. The firm is due to report its fourth-quarter results on October 30, and analysts look forward to hearing good news. Apple shares are up 7 percent this year, but that’s below the broader tech industry, which rose 23 percent.
News At Glance
- Apple momentarily reached $4 trillion market value on Tuesday, third company in history
- Shares up 13% since iPhone 17 and iPhone Air were released September 9
- Initial iPhone 17 sales trounced prior model by 14% in U.S. and China
- Company offset high tariff costs rather than passing them on to customers
- Concerns persist over Apple’s sluggish development of artificial intelligence features
FAQs
Q: Why did Apple become worth $4 trillion?
A: Healthy sales of the latest iPhone 17 series and iPhone Air introduced in September. Buyers in key markets such as the U.S. and China purchased more of the latest models than their older counterparts.
Q: Which are other firms worth $4 trillion and above?
A: Only two others – Microsoft and Nvidia. Nvidia is now the biggest tech company by market value at nearly $5 trillion.
Q: Why do iPhones mean so much to Apple?
A: iPhones contribute more than half of Apple’s overall profit and revenue. When individuals purchase iPhones, they typically purchase other Apple products and services along with them.
Q: What issues has Apple encountered this year?
A: The firm faced tough competition in China, high U.S. tariffs on Asian-made products, and worries about being behind in artificial intelligence compared to other technology firms.
Q: How and when will Apple report its next financial results?
A: October 30. Strong numbers are expected by analysts on the back of good iPhone sales and the firm’s upbeat forecasts made earlier this year.
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