Apple (AAPL.O) is closing in on a historic $4 trillion stock market valuation, powered by investors cheering progress in the company’s long-awaited AI enhancements to rejuvenate sluggish iPhone sales.

The company has pulled ahead of Nvidia (NVDA.O) and Microsoft (MSFT.O) in the race to the monumental milestone, thanks to an about 16% jump in shares since early November that has added about $500 billion to its market capitalization.

The latest rally in Apple shares reflects “investor enthusiasm for artificial intelligence and an expectation that it will result in a supercycle of iPhone upgrades,” said Tom Forte, an analyst at Maxim Group, who has a “hold” rating.

Valued at about $3.85 trillion as of the last close, Apple dwarfs the combined value of Germany (.GDAXI) and Switzerland’s (.SSMI) main stock markets.

The Silicon Valley firm, driven by the so-called iPhone supercycles, was the first U.S. company to hit previous trillion-dollar milestones.

In recent years, the company has attracted criticism for being slow to map out its artificial intelligence strategy, while Microsoft, Alphabet, Amazon and Meta Platforms have pulled ahead to dominate the emerging technology.

Shares of Nvidia, the biggest AI beneficiary, have surged more than 800% over the past two years, compared to the near doubling in shares of Apple during the same period.

Apple earlier in December started integrating OpenAI’s ChatGPT into its devices after unveiling plans in June to integrate generative AI technology across its app suite.

He’s assisted by the wearable exoskeleton robot he helped develop.

The company expects overall revenue to increase “low- to mid-single digits” during its fiscal first quarter – a modest growth forecast for the holiday shopping season – sparking questions about the momentum for the iPhone 16 series.

However, LSEG data showed analysts expect revenue from iPhones to rebound in 2025.

“Although near-term iPhone demand is still muted … it is a function of limited Apple Intelligence features and geographic availability, and as both broaden, it will help to drive an improvement in iPhone demand,” Morgan Stanley analyst Erik Woodring said in a note, reiterating Apple as the brokerage’s “top pick” heading into 2025.

The recent surge in shares has pushed Apple’s price-to-earnings ratio to a near three-year high of 33.5, compared to 31.3 for Microsoft and 31.7 for Nvidia, according to LSEG data.

Warren Buffett’s Berkshire Hathaway (BRKa.N) has sold shares of Apple – its top holding – this year, as the conglomerate broadly retreated from equities on concerns over stretched valuations.

“I suspect the stock in three years will not look as expensive as it does today,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund, which holds Apple shares.

Apple faces the risk of retaliatory tariffs if U.S. President-elect Donald Trump delivers on his promise to slap tariffs of at least 10% on goods coming from China.

“We believe it’s likely Apple gets exclusions on products like iPhone, Mac and iPad, similar to the first round of China tariffs in 2018,” Woodring said.

Apple’s shares tumbled last Wednesday amid a Wall Street selloff after the Federal Reserve forecast a slower pace of rate cuts next year but investors expect the broad trend of monetary easing to support stock markets next year.

“Technology has been regarded by investors as a new form of a defensive sector because of their earnings growth,” said Sam Stovall, chief investment strategist at CFRA Research.

The Fed’s action “could end up having a greater impact on some of the other cyclical areas such as consumer discretionary and financials and less so on technology.”

“Apple’s approach to $4 trillion market cap is a testament to its enduring dominance in the tech sector. This milestone reinforces Apple’s position as a market leader and innovator,” said Adam Sarhan, chief executive officer of 50 Park Investments.

Alphabet’s (GOOGL.O) Google’s proposed changes to its search results to comply with EU tech legislation has received the thumbs up from lobbying group Airlines for Europe whose members include Air France KLM and Lufthansa (LHAG.DE).

Google has announced a series of changes in search result formats in recent months following conflicting demands from price-comparison sites, hotels, airlines and small retailers, with the latest tweaks announced last month.

It is trying to comply with the Digital Markets Act (DMA), which prohibits it from favouring its own products and services on its platform or risk fines as much as 10% of its global annual turnover.

“In the spirit of finding a DMA-compliant solution in a timely fashion, the airline industry has shown it is willing to compromise,” Airlines for Europe said in a letter to the European Commission dated Dec. 20 and seen by Reuters.

The airline group expressed support for the horizontal layout for same sized boxes for airlines and comparison sites in search results as well as the colour blue to distinguish them from other elements.

But it said prices displayed in search results should be the same in the graphic as those in the boxes. It also expressed concerns about Google’s proposal for a purely indicative date rather than specific dates for consumers looking to book flights.

Countries negotiating a global treaty to curb plastic pollution failed to reach agreement on Monday.

“Characteristics such as dates are an integral part of the general search process of consumers looking for air travel and the switch to a purely indicative date will downgrade their experience significantly,” the group.

Google has said it may return to an old format of 10 blue links in search results that it used years ago if its rivals – such as airlines and price comparison sites – cannot agree on its proposals to comply with the DMA and not promote its own products.

Thirty Indian companies have answered the space regulator’s call to build and operate constellations of Earth observation (EO) satellites in a groundbreaking private-public partnership to reduce the country’s reliance on foreign data for defense, infrastructure management and other critical mapping needs.

“We have received 9 applications … Each applicant represents a consortium, involving a total of 30 companies,” said Pawan Goenka, chairman of the Indian National Space Promotion and Authorisation Centre, or IN-SPACe.

The regulator had sought “expressions of interest” (EoI) in July to build home-grown satellite constellations as part of a broader strategy to monetize the sector and ensure data sovereignty.

India is doubling down on its small satellite and data services market to carve out a leading role in the global commercialization of space. The market for such services, increasingly key for industries ranging from telecoms to climate monitoring, is projected to reach $45 billion by 2030.

The applicants for IN-SPACe’s latest effort in this regard include startups such as Google-backed Pixxel and Baring Private Equity-backed SatSure, as well as larger entities like Tata Group’s Tata Advanced Systems. The companies did not immediately respond to requests for comment.

Goenka said he expects technical evaluations to be completed by the end of January, after which a tender will be floated to determine the winning bidder.

IN-SPACe’s eligibility criteria include applicants raising or investing at least 850 million rupees ($10 million) in space-related activities, having a valuation of 8.5 billion rupees, or a turnover of 2 billion rupees in the past three years.

They must also set up spacecraft control centres in India or partner with ground station service providers for operational needs.

According to a source familiar with the matter, the government plans to loan up to 3.5 billion to the winner, with private companies expected to cover the remaining costs.

Since opening the sector to private players in February, India has established a 10-billion-rupee venture fund to support space startups.

The country has also unveiled ambitious plans for crewed space exploration and a mission to Venus, but the primary focus remains on fostering commercial ventures and scaling up private sector participation.

India currently sources much of its EO data from foreign companies and agencies like the European Space Agency (ESA) and the Indian Space Research Organisation (ISRO).

IIFCL Projects Ltd, an advisory arm under the Ministry of Finance, is overseeing the bidding process.