Apple reclaims title as world's biggest company as it races against Microsoft and Nvidia to a $4 trillion valuation

• Apple has reclaimed the top spot as the world's largest company with a $3.31 trillion valuation.
• The AI boom has driven Apple, Microsoft, and Nvidia stocks to record highs.

Apple reclaimed the top spot as the world's largest company by market cap on Wednesday.

Apple stock soared more than 4% in Wednesday trades, bringing its total market valuation to $3.31 trillion.

Meanwhile, shares of Microsoft rose just over 1% to a $3.26 trillion valuation, while shares of Nvidia soared about 4% to a nearly $3.1 trillion valuation.

The AI boom has catapulted all three mega-cap tech stocks higher, with Apple the latest company to join the AI party with its unveiling of "Apple Intelligence" at its WWDC event on Monday.

Since then, shares of Apple have soared 12%.

According to Dan Ives, the three tech giants are now in a race to a $4 trillion valuation, which should be reached over the next year thanks to the continued adoption of AI technologies.

"The AI Revolution starts with Nvidia and in our view the AI party is just getting started as it's 9 pm in a party going till 4 am with the rest of the tech world now joining," Ives said in a note on Wednesday.

A $4 trillion valuation would represent potential upside of 21%, 23%, and 29% for Apple, Microsoft, and Nvidia, respectively.

For Apple specifically, Ives said the iPhone maker has a "holy AI grail" opportunity in the form of its massive 1.5 billion installed base of smartphones, with an estimated 270 million iPhones not having been upgraded in more than four years.

"This will catalyze a long awaited super cycle in Cupertino," Ives said, pointing to its new AI product features as something that consumers will want.

Ives also argued that Apple's WWDC release of AI software will allow developers to start building hundreds of AI-focused apps to build upon Apple's AI tech stack, "in essence creating a new AI App Store over the coming years that will be the main way that consumers interact with generative AI."

"Taking this a step further, we believe eventually this will lead to a bundled subscription service for Apple around higher end AI capabilities that will be another major catalyst for the Services segment over the coming years," Ives said.

But don't count Microsoft and Nvidia out of the race to $4 trillion.

"Nvidia and Microsoft are the first derivatives of the AI Revolution," Ives said.