Prediction: Apple Will Become a $5 Trillion Company on July 30
Key Points
Apple has a cost-effective AI development program that the market is approving.
It has recently announced a slew of positive updates, including high iPhone sales.
If Apple beats expectations on July 30, the stock should surpass $5 trillion in value.
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The market can be fickle, and Apple (NASDAQ: AAPL) stock has been feeling that sentiment over the past few years. It lost market confidence when it appeared to lag in artificial intelligence (AI) development, but it's come roaring back as iPhone sales soar and Apple Intelligence comes to life for a fraction of what Apple's peers are spending.
On the heels of the market's enthusiasm, Apple reports earnings on July 30. Here's why it could become the second company to reach $5 trillion in value.
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Why Apple stock is on fire
After sitting in the doldrums as AI giants like Amazon and Alphabet made impressive progress in AI, Apple demonstrated its astute method when it announced a deal with Alphabet to "rent" the Gemini large language model (LLM) and customize it for its own use. The deal is that Apple pays Alphabet $1 billion annually -- a fraction of the $200 billion both Amazon and Alphabet plan to spend on AI in 2026 alone. Apple stock began to rise from there, but there have been many other exciting updates since then.
Image source: Apple.
Apple impressed the market with continued elevated iPhone sales, which increased 23% year over year in the 2026 fiscal first quarter (ended Dec. 27), the all-important holiday season, and 21% in the second quarter (ended March 28). The company beat Wall Street's expectations for earnings per share (EPS) in both quarters, like it usually does.
It recently announced a new deal with Broadcom, which has been a main supplier of tech infrastructure for years. While that obviously benefits Broadcom, the market also took it as a win for Apple as it continues to build for future growth.
This month, CNBC reported that Apple was in talks with a start-up that could "shrink" LLMs to work on an iPhone. The company also just launched Apple Upgrade, a new product leasing program in the U.S.
The $5 trillion status
Apple stock is just a rounding error off $5 trillion as of this writing, with a market value of $4.97 trillion, and it briefly touched $5 trillion on Tuesday. It has already dethroned Nvidia to become the most valuable company in the world again. Its stock has jumped 27% over the past three months, while Nvidia stock has dropped 9%.
For the third quarter, results of which will be announced on July 30, Wall Street is looking for $108.96 billion in revenue, or a 16% increase over last year, and $1.89 in EPS, up from $1.57.
If the market approves the Q3 report, Apple stock should easily tip past $5 trillion. It will be only the second company ever to reach a $5 trillion value, but the pertinent fact for investors is that historically, it doesn't make sense to underestimate Apple.
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Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, and Nvidia. The Motley Fool has a disclosure policy.
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