02:04 PM EDT, 06/12/2024 (MT Newswires) -- Apple ( AAPL ) once again became the world's most valuable company Wednesday, overtaking Microsoft ( MSFT ) , amid a rally in the iPhone maker's shares following the announcement of its long-awaited artificial intelligence strategy earlier this week.

Apple ( AAPL ) shares were up 4.8% at $217.10 as of 1:40 pm ET, with its market capitalization reaching about $3.328 trillion, while Microsoft ( MSFT ) was valued at $3.267 trillion. Microsoft's ( MSFT ) market cap fell behind Apple ( AAPL ) for the first time in five months. Apple ( AAPL ) shares jumped 7.3% Tuesday, making it the top gainer on all three US benchmark equity indexes. The stock is up nearly 13% so far this year.

The technology giant on Monday announced a partnership with Microsoft ( MSFT )-backed OpenAI's generative AI chatbot ChatGPT at its 2024 World Developers Conference, along with a number of AI features debuting as Apple Intelligence across the company's devices and operating systems. Affirm (AFRM) on Tuesday announced an integration with Apple Pay.

Although Apple ( AAPL ) has been late in jumping onto the AI bandwagon, it has now joined fellow tech heavyweights Microsoft ( MSFT ) and Nvidia ( NVDA ) in the race to a $4 trillion market cap over the next year, Wedbush Securities said in a Wednesday note.

As Apple ( AAPL ) rolls out its AI strategy, it is expected to catalyze "a long-awaited super cycle in Cupertino, with 270 million iPhones of the 1.5 billion worldwide in the golden installed base" not upgrading their smartphones in more than four years, Wedbush analyst Daniel Ives said in a note Wednesday. The brokerage now expects developers to build "hundreds of apps" on top of Apple's ( AAPL ) AI stack, effectively creating a new AI App Store over the coming years, according to Ives.

"Taking this a step further, we believe eventually this will lead to a bundled subscription service for Apple ( AAPL ) around higher-end AI capabilities that will be another major catalyst for the services segment over the coming years," Ives wrote. The company likely has "a unique advantage to monetize the AI party, which is just beginning to play out."

Earlier this month, Nvidia ( NVDA ) passed Apple ( AAPL ) to briefly become the second-most valuable public company in the US on the back of its recent AI partnerships.

"Nvidia's ( NVDA ) (graphics processing unit) chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the 4th industrial revolution well underway," Wedbush analysts said Wednesday. "It's all about the pace of data center AI-driven spending as the only game in town for GPUs to run generative AI applications all go through Nvidia ( NVDA )."

Last week, Oppenheimer said Microsoft's ( MSFT ) partnership with OpenAI is "positive and sustainable" and likely to help the tech giant reach $50 billion in generative AI revenue in four years.

"While the bears will continue to harp on valuations of Nvidia ( NVDA ), Microsoft ( MSFT ), Palantir ( PLTR ), MongoDB ( MDB ) and other AI pure-plays, we believe investors that have missed the biggest transformational tech stocks the last decade, including Amazon.com ( AMZN ), Netflix ( NFLX ), Meta, Apple ( AAPL ), Alphabet among many others, have dogmatically stuck with the forward PE valuation approach on these unique tech stories," Ives said Wednesday.

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