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Apple and Microsoft are each within touching distance of a $4tn (£3.01tn) market valuation, setting the stage for a big week of earnings on Wall Street as investor confidence in AI continues to propel Big Tech stocks to new heights. Both tech heavyweights’ shares rose on Monday, leaving them less than two per cent away from crossing the threshold, a level only chipmaker Nvidia has reached so far. Apple’s stock hit an all-time high of $268.98, while Microsoft also climbed sharply ahead of its quarterly earnings report later this week. The two firms would join Nvidia in a $4tn club that now symbolises the dominance of a small group of US tech behemoths whose valuations have swelled on AI-fuelled optimism and vast financial bets. Alphabet and Meta, meanwhile, have recently hit $3tn and $2tn market caps respectively, while Tesla and Amazon round out the so-called ‘magnificent seven’ that collectively make up about a third of the S&P 500 index. Record valuations ahead of key earnings The market milestone comes as both companies prepare to report quarterly results this week. Apple is forecast to deliver between $101bn and $102bn in revenue, while Microsoft is expected to post strong cloud and enterprise growth despite a broader slowdown in tech spending. Analysts at JPMorgan reiterated an ‘overweight’ rating on Apple and raised their price target to $290, citing resilience in its services business and long-term AI potential. Still, concerns remain around whether current valuations can be sustained if AI-driven enthusiasm cools. Meanwhile, despite its market momentum, Apple continues to face regulatory headwinds, including ongoing scrutiny of its App Store fees and antitrust concerns in the US and Europe. However, these risks have so far done little to dent investor sentiment, with markets focused instead on growth in services and the company’s potential AI rollout. Big Tech dominance fuelled by AI The latest rally has been powered by soaring expectations around AI, with investors betting that Apple and Microsoft will lead the next wave of innovation. Microsoft’s early investment in OpenAI has cemented its leadership in enterprise AI, while Apple is expected to unveil deeper AI integration across its devices and software in the coming months. Analysts have said the scale and balance sheet strength of both firms give them a competitive edge as AI reshapes global markets. “The developed world is growing at 10 per cent… that’s a good benchmark for me”, said Microsoft chief executive Satya Nadella. Microsoft’s Azure cloud division remains a central growth engine, while Apple continues to expand its services arm, which is now expected to generate over $100bn in annual revenue for the first time, according to Visible Alpha estimates.
