Apple's stock experienced a 2% increase on Friday, driven by an optimistic forecast that raised expectations for a rebound in iPhone sales, despite ongoing challenges from fierce competition and a lack of AI features impacting demand in the crucial Chinese market.

As the most valuable company globally, Apple stands to gain over $81 billion, boosting its market capitalization to $3.573 trillion, provided these gains are sustained.

The company has been facing investor concerns regarding iPhone demand, attributed to a gradual introduction of its AI-driven Apple Intelligence features. However, it anticipates revenue growth in the low- to mid-single-digit percentage range for the current quarter.

The positive forecast indicates a potential uptick in demand for the iPhone 16 series, which was launched in September without many of the anticipated Apple Intelligence features, although recent updates have introduced new services, including ChatGPT integration.

"Fears had mounted (heading into Apple's first-quarter earnings report). But the company flipped them to the mat," remarked Barton Crockett, an analyst at Rosenblatt.

While competitors like Microsoft and Alphabet have invested heavily in AI, Apple has opted for a more measured strategy, concentrating on utilizing the technology to enhance device sales rather than engaging in significant capital expenditures.

"With investors highly tuned into how AI spend will represent real revenue for big tech, Apple's results have provided ... reassurance," stated Susannah Streeter, head of money and markets at Hargreaves Lansdown.

China, being Apple's third-largest market, is still a bit worrisome. 

The company hasn't found a local partner yet to launch its AI features, and local competitors like Huawei are making a comeback, taking away some of Apple's market share with their eye-catching devices. 

In the last quarter of 2024, Apple saw an 11% drop in sales in China, following a slight dip in the previous quarter. 

However, J.P. Morgan analysts believe that the government stimulus measures introduced earlier this month could help Apple reverse this sales decline. 

At least 12 analysts have raised their price targets for the stock, and Apple shares rose about 30% last year. In comparison, Meta had a whopping 65% increase, leading the Big Tech pack, while Microsoft only saw a 12% rise. 

Currently, Apple's 12-month forward price-to-earnings ratio stands at 31.12, which is higher than Microsoft's 29.2 and Meta's 26.7.