On Monday, Apple Inc’s market valuation was just shy of $3 trillion, following a spectacular run over the last decade that has elevated it to the status of the world’s most valuable business.
On Monday, the company’s shares slid slightly over 2% to settle at $175.74, reversing earlier advances that saw it near the $182.86 price needed to reach a market value of $3 trillion.
Last week, Apple’s stock jumped by 11%, extending its year-to-date rise of more than 30%, as investors remain confident that wealthy customers will continue to pay top price for iPhones, MacBooks, and services like Apple TV and Apple Music.
The iPhone maker led a group of mega-cap tech companies including Apple Google parent Alphabet Inc and Amazon.com Inc that benefitted from people and businesses relying significantly on technology over the period from $2 trillion to almost $3 trillion in market value.
For example, Apple took two years to go from $1 trillion to $2 trillion in market capitalization.
“It’s now one of the more highly valued businesses in the market,” said Brian Frank, a portfolio manager at Frank Capital, who sold his long-standing investment in Apple in 2019 as the stock’s price soared. “It appears that the stock has factored in every positive result.”
According to Daniel Morgan, senior portfolio manager at Synovus Trust Company, new revenue lines that investors expect include a possible Apple Car, as well as growth in service categories such as apps and TV, which are still well below the 65 percent of the company’s revenues generated by iPhone sales.
Chief Executive Tim Cook, who took over after Steve Jobs quit in 2011 and overseen the company’s expansion into new products and markets, would be ecstatic to surpass the $3 trillion barriers.
“Over the last decade, Tim Cook has done an incredible job, bringing Apple’s share price up over 1,400 percent,” said OANDA analyst Edward Moya.
Since the 1990s, Apple shares have gained 22 percent each year, whereas the S&P 500 has only returned less than 9% per year.
If Apple surpasses the $3 trillion mark, Microsoft Corp will be the lone business in the $2 trillion clubs, with Alphabet, Amazon, and Tesla Inc having already surpassed the $1 trillion mark.
Microsoft, with a market capitalization of $2.6 trillion, was the most valuable corporation in the world until late October when Apple warned that supply chain issues could stymie its growth for the rest of the year.
As firms transitioned to a hybrid work paradigm and consumers upgraded their gadgets, large technology stocks have surged this year, with investors tapping increased demand for cloud-based products. The Nasdaq 100, which is dominated by huge corporations like Apple, is up over 26% this year, while the S&P 500 index is up roughly 24%.
As the global economy recovers from the coronavirus epidemic and supply chain pressures lessen, emerging technologies such as 5G, augmented reality/virtual reality, and artificial intelligence may help Apple and other cash-rich major technology stocks remain popular with investors.
In a note, Daniel Morgan, senior portfolio manager at Synovus Trust Company, stated, “I am in the camp that is experiencing another ‘Super Cycle’ with the iPhone12/iPhone 13 franchise.” “And that AAPL is on track for another string of excellent revenue and profit growth quarters.”
