Apple Stock Hits Record High on $200 Billion AI Surge

Apple’s stock soared to an all-time high on Tuesday, marking its most significant daily percentage gain since late 2022. The surge came as investors welcomed the iPhone maker’s highly anticipated announcement regarding its foray into generative artificial intelligence (AI).

Shares of Apple climbed over 7% to $207 by the close of regular trading hours, surpassing its previous record close by $8 and crossing the $200 mark for the first time, adjusted for stock splits. This spike resulted in a market capitalization surge of approximately $215 billion, pushing Apple’s market value to $3.2 trillion. This increase ranks among the top 10 largest daily market value surges in history.

The rally followed Apple’s unveiling of several AI features slated to arrive on iPhone and other devices later this year. The most notable of these is the integration of OpenAI’s popular generative AI chatbot, ChatGPT, directly into iPhone applications.

Investors responded positively to the AI rollout, causing Apple’s stock to rebound from premarket losses and a slight decline in Monday afternoon trading, which occurred during and after Apple’s Worldwide Developers Conference keynote event.

While other major tech stocks remained relatively flat, with shares of the world’s other five trillion-dollar tech companies moving less than 1% on Tuesday, Apple closed the market cap gap between itself and the world’s largest company, Microsoft, to less than $50 billion. Apple also surged ahead of Nvidia, which surpassed Apple as the world’s second-largest company just last week, by about $200 billion in market value.

According to JPMorgan analysts led by Samik Chatterjee, Apple’s keynote at WWDC showcased enough enhancements to ensure an expected upgrade cycle with the launch of the iPhone 16 and the release of iOS18 in the fall of this year. This comes at a crucial time for Apple, as iPhone sales are expected to drop to their lowest level since 2020 during the current quarter, based on consensus analyst forecasts compiled by FactSet.

Despite Apple’s stock being up only 7% year-to-date, including dividends, compared to the S&P 500’s 13% gain, the recent surge indicates a significant turnaround for Apple. Just a few months ago, Apple’s shares were down 12% for the year as of the end of April.

Apple’s introduction of its comprehensive “Apple Intelligence” generative AI offerings on Monday was a highly anticipated move. The announcement included upcoming upgrades to the iPhone’s Siri voice assistant and messaging features, all powered by OpenAI. Apple has taken a different approach from its tech counterparts, such as Google parent Alphabet, Facebook parent Meta, and Microsoft, all of whom developed their own large-language models to compete with OpenAI. “Apple’s stance seems to be, we don’t need to pursue artificial general intelligence; we can leave that to Meta, OpenAI, et al, saving billions,” summarized Rosenblatt analyst Barton Crockett.

Despite the recent rally, Apple remains behind Microsoft as the world’s most valuable company, a title Apple lost in January.