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Apple is poised to become the world’s first $3 trillion (£2.3 trillion) company as it emerged that a secret deal with China had helped fuel the iPhone maker’s growth in recent years.
Shares rose more than 3pc to a new record high above $170, valuing the company at $2.8 trillion and putting it further ahead of US rivals.
The jump was sparked by analysts at Morgan Stanley putting a target of $200 on Apple shares, which would leave it worth more than $3.2 trillion. The investment bank said investors are underestimating the value of its potential new products.
Microsoft, which briefly surpassed Apple in October, is worth $2.5 trillion while Google owner Alphabet and Amazon are both below $2 trillion.
It came as a report said that Tim Cook, Apple’s chief executive, had committed to spending hundreds of billions of dollars in China to appease Beijing authorities.
He brokered a $275bn deal to invest in Chinese companies, manufacturing and research partnerships with universities in 2016 in a bid to ward off regulators in the country, The Information website reported.
Mr Cook reportedly agreed to the secret five-year investment deal in China as part of a lobbying blitz designed to win over authorities as Beijing tightened its grip on the internet.
The deal was said to include an agreement to use components from Chinese companies, open more stores in the country, and commit to renewable energy projects.
Apple’s sales in China, which were suffering at the time, have since recovered, while the company has evaded a feared crackdown in response to US measures against Huawei.
Apple has been contacted for comment.
The company co-founded by Steve Jobs has held the crown of the world’s most valuable firm for most of the last decade and in 2018 became the first to hit a trillion-dollar valuation.
It reached the $2 trillion mark just last year and shares have climbed another 40pc since then.
The value of the five big US tech companies - Apple, Amazon, Microsoft, Alphabet and Facebook - have soared since the start of the pandemic.
While its rivals have stalled in the last month amid concerns about the omicron variant, Apple has risen by a further 13pc as investors anticipate record festive season sales.
Morgan Stanley said Apple’s value would increase as investors turn their attention to new initiatives such as virtual and augmented reality (AR/VR) and driverless cars.
“We know that Apple is working on products to address two significantly large markets – AR/VR and autonomous vehicles – and as we get closer to these products becoming a reality, we believe valuation would need to reflect the optionality of these future opportunities,” it said.
The analysts predicted that an Apple VR headset could bring in $29bn a year in revenue by 2026.
The company has never confirmed plans for a headset but has filed patents related to the technology and is expected to launch a device as early as next year.
“The consensus view is that the real catalyst for mass market AR/VR adoption will come when Apple enters the market,” said Morgan Stanley.
Virtual reality involves a headset that aims to transport wearers into immersive virtual worlds, while augmented reality involves projecting digital objects into the real world, and is regarded as more difficult technology to master.
Apple is expected to launch a VR device first before moving on to AR glasses, although it could release a device that combines the two technologies.
Facebook is also investing heavily in the technology, and recently changed its name to Meta to reflect its increasing focus on the “metaverse”, a term related to virtual worlds.