Key points:
Apple (Symbol: AAPL) has made history by becoming the first company to close with a market valuation exceeding $3.5 trillion. This milestone was achieved after a robust rally in its share price, which has been on an upward trajectory since April.
The stock closed at a record high of $228.68, reflecting a more than 30% increase in market cap over the last three months.
The image above shows the jump in stock price of Apple, as observed on the VT Markets app.
A significant catalyst for this surge is the recent foray into artificial intelligence. The unveiling of its AI strategy, Apple Intelligence, for one, has generated considerable excitement in the markets.
This move marks an official entry by Apple into the competitive AI landscape, a sector which has already has driven substantial growth for other tech giants.
The markets are optimistic that investment in AI by Apple will not only boost its innovation pipeline but also drive higher iPhone sales in the upcoming autumn quarter.
This optimism is reflected in the soaring share price, which has seen Apple add approximately $952 billion to its market cap since April 19. For context, this increase is greater than the entire valuation of electric vehicle maker Tesla (Symbol: TSLA) and equals the worth of the seventh-largest company in the United States.
Apple is set to report its financial results for the spring quarter on August 1. Despite the company ceasing to provide forward guidance in 2020, quarterly revenues of $77.2 billion are being projected. Markets are keenly watching these results for further indications of how the AI initiatives and other strategic investments of Apple will translate into financial performance.
For day traders, the current momentum presents both opportunities and risks. The strong upward trend offers potential for breakout trades, particularly above recent highs.
However, the volatility around earnings announcements and major product updates necessitates careful risk management. Traders can capitalise on intraday price swings using technical analysis to identify entry and exit points.
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