© Reuters. FILE PHOTO: Members of the media film the new iPhone 7 at an Apple store in Beijing

By Akanksha Rana

(Reuters) – Apple Inc shares rose more than 6 percent on Wednesday, pushing the iPhone maker’s market valuation back towards $1 trillion as its quarterly report and upbeat forecast calmed investors worried about slowing growth.

The Cupertino, Calif.-based company has been jockeying with Microsoft Corp (NASDAQ:) and Amazon.com (NASDAQ:) for the title of most valuable U.S. company as all three have passed the symbolic trillion mark.

(For a graphic on Apple: R&D Versus Buybacks Versus Total Cash, click https://tmsnrt.rs/2vyr2oi)

Apple first breached the trillion-dollar valuation in August last year, but later gave up the gains as signs emerged of weak demand for its newest iPhones, especially in China, the world’s biggest smartphone market.

Shares of the company were up at $213.97, valuing it at around $986 billion, based on the 4.6 billion shares that its second-quarter report on Tuesday said were outstanding as of the end of March.

That pushed it ahead of Amazon, but just behind Microsoft in terms of market value, largely because the number of Apple shares (NASDAQ:) has fallen steadily as it returns billions of its profits to investors by buying back its own stock.

The company’s last regulatory filing in January showed there were more than 4.715 billion shares outstanding at the end of December and a formal quarterly filing expected later on Wednesday should give an even lower number.

Apple’s buybacks last year amounted to more than $70 billion, or around five times its own spending on research and development, even then barely putting a dent in the $200 billion cash https://tmsnrt.rs/2vyr2oi pile it has racked up in a decade of iPhone and iPad sales.

The research budget remains one of the world’s largest, some measure of Apple’s need to generate a new cash cow as investors worry about the extent to which cheaper competitors are eating into the iPhone’s global dominance.

For now, while iPhone sales fell again in the second quarter, the company’s services revenue beat Wall Street expectations and it forecast an upbeat third quarter.

At least eight brokerages hiked their price targets on the stock, with Jefferies making the most aggressive move by raising its target by $50 to $210.

“Apple reported a clean March quarter and bullish June quarter outlook which against a backdrop of negative investor sentiment sets up for shares to move higher,” Morgan Stanley (NYSE:) analysts said.

Analysts said iPhone demand in China was getting better as Apple cut prices, upgraded its device financing program and benefited from improved trade dialogue between the United States and China.

“We believe Apple has locked up strong share of the premium tier market and will continue to dominate high-end smartphones sales and capture the vast majority of smartphone profits for the next several years,” Canaccord Genuity analysts said.

(For a graphic on Apple back in the $1 trillion race, click https://tmsnrt.rs/2ZQv8q2)

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