Apple (NASDAQ: AAPL) is the most valuable company in the world right now with a market capitalization of almost $3.3 trillion, but shares of the tech giant have underperformed some of the other big technology names so far this year.

Apple, along with Amazon , Nvidia , Microsoft , Alphabet , Meta Platforms , and Tesla , are the seven biggest technology-focused companies that have played a central role in driving the stock market's rally in the past year and a half. They are collectively known as the " Magnificent Seven ." It is worth noting that some of them, such as Nvidia, Meta, and Alphabet, have delivered stronger gains than the market in 2024.

However, it won't be surprising to see Apple stock stepping on the gas in the closing stages of 2024 and eventually getting to the $4 trillion market cap milestone, which is 21% away from its current valuation.

AI is likely to lift Apple's sales

Apple has yet to introduce artificial intelligence (AI)-enabled smartphones as compared to rivals such as Samsung and other Chinese original equipment manufacturers that have already jumped on this bandwagon. However, that is likely to change next month when the company launches its next generation of iPhones, which are set to support the company's generative AI suite of features known as Apple Intelligence.

The tech giant introduced Apple Intelligence in June this year, pointing out that this platform will be "deeply integrated into iOS 18, iPadOS 18, and macOS Sequoia." Apple Intelligence has a host of generative AI features that could trigger a new upgrade cycle, encouraging users on older devices to upgrade to the latest iPhones.

J.P. Morgan analyst Samik Chatterjee believes that the next iPhone will kick off a new upgrade cycle that will last beyond Apple's 2025 iPhone generation. More specifically, the analyst estimates that Apple could see a 10% increase in iPhone unit sales in fiscal 2025 to 244 million units. Apple's fiscal 2025 will begin late next month and coincide with the launch of its AI-enabled iPhones.

J.P. Morgan sees iPhone sales rising to 268 million units in fiscal 2026, indicating that the upgrade cycle will intensify when the company updates its lineup next year. The good news for Apple investors is that the iPhone isn't the only device that's going to get a dose of AI injection. Apple Intelligence will be available on MacBooks as well.

These markets could unlock another solid growth opportunity for Apple. For instance, the generative AI personal computer (PC) market is expected to grow from annual shipments of 48 million units in 2024 to 205 million units in 2028. The addition of Apple Intelligence to the company's Mac operating system puts it in a nice position to take advantage of this secular growth opportunity in the long run.

All this indicates that Apple could be at the beginning of a new growth curve that could eventually help the stock regain its mojo and head higher in the long run. However, a closer look at a recent sales number from Apple's key chip manufacturing partner indicates it won't be long before the tech giant attains a $4 trillion market cap.

One key sign that Apple is preparing for an aggressive AI-enabled iPhone rollout

The processors that power Apple's iPhones are manufactured by foundry giant Taiwan Semiconductor Manufacturing , popularly known as TSMC. Apple is said to be TSMC's largest customer, accounting for 25% of its top line last year. The tech giant is reportedly one of the companies to have fully booked the Taiwan-based company's supply of 3 nanometer (nm) chips.

With Apple's iPhone 16 models set to sport 3nm processors, it is not surprising to see rumors that the company has been ordering more chips from TSMC. Reports suggest that Apple's iPhone 16 production in 2024 could be 10% higher than the number of iPhone 15 models it produced in 2023. This is probably the reason why TSMC recently reported a terrific 45% year-over-year jump in its revenue for July.

For comparison, TSMC's July revenue was down almost 5% year over year in 2023. Of course, Apple may not have been the only customer to have driven TSMC's revenue growth last month. However, as the iPhone maker is TSMC's largest customer, there is a good chance that it has increased its chip orders in a bid to roll out its next-generation smartphone lineup aggressively.

That would be a smart thing to do as shipments of generative AI smartphones are forecast to increase a whopping 364% this year to 234 million units. As Apple's AI-capable iPhones will hit the market just in time for the holiday period, they could witness stronger-than-expected demand. As a result, Apple's growth in the final six months of 2024 could upstage Wall Street's expectations.

According to a consensus of 49 analysts covering Apple, the stock has a 12-month median price target of $250, which would be a 16% increase from current levels. However, an acceleration in Apple's growth thanks to AI could help the stock deliver much stronger gains in 2024 itself and approach the Street-high price target of $300, which will be more than enough to make it the world's first $4 trillion company by the end of the year.

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