The recent iOS 18.2 software update enhances Apple's AI capabilities, introducing features like Visual Intelligence and Image Playground, which are exclusive to iPhone 15 Pro and iPhone 16 users.

However, Berkshire Hathaway, led by Warren Buffett, has reduced its stake in Apple this year due to concerns over high market valuations.

Despite recent stock market volatility and a dip following the Federal Reserve's forecast of slower rate cuts, technology stocks like Apple are still viewed as defensive investments due to their earnings growth potential.

Notably, there are approximately 300 million iPhones in use that have not been upgraded in the past four years, indicating a significant market opportunity for Apple.

Despite previous criticisms regarding its slow AI strategy compared to competitors, Apple has begun integrating OpenAI's ChatGPT into its devices as part of a broader AI initiative.

In December 2024, Apple initiated the integration of ChatGPT into its devices, following plans announced earlier in June to implement generative AI across its applications.

With a vast ecosystem of 2 billion iOS devices and 1.5 billion iPhones globally, Apple has significant opportunities to leverage AI integration to boost sales.

Apple's share price surge has driven its price-to-earnings ratio to 33.5, the highest in nearly three years, surpassing those of Microsoft and Nvidia.

Wedbush believes that the success of the iPhone 16 during the holiday season could spark a growth renaissance for Apple over the next 12 to 18 months.

Apple is on the verge of achieving a historic $4 trillion stock market valuation, driven by investor optimism surrounding advancements in artificial intelligence (AI) aimed at revitalizing sluggish iPhone sales.

For the upcoming fiscal first quarter, Apple is forecasting overall revenue growth, bolstered by strong expectations for the iPhone 16.

Analysts from Wedbush, led by Dan Ives, predict that Apple will sell over 240 million iPhones in the 2025 fiscal year, potentially marking the highest sales year in the company's history.