Apple’s market value is hovering just shy of the $US3 trillion ($4.2 trillion) mark following a stunning run over the past decade that has turned it into the world’s most valuable company.
The company’s shares fell just over 2 per cent on Monday to close at $US175.74, reversing earlier gains that saw them approach the $US182.86 price needed to record a $US3 trillion market value.
Apple’s stock rose about 11 per cent last week, extending its more than 30 per cent year-to-date gain as investors remain confident that flush consumers will continue to pay top dollar for iPhones, MacBooks and services such as Apple TV and Apple Music.
The iPhone maker’s march from $2 trillion to near $3 trillion in market value took 16 months, as it led a group of mega-cap tech companies such as Google-parent Alphabet and Amazon that benefited from people and businesses relying heavily on technology during the pandemic.
By comparison, Apple’s move from $1 trillion to $2 trillion took two years.
“It’s now one of the more richly valued companies in the market, which shows the dominance of US technology in the world and how confident investors are that it will remain in Apple’s hands,” said Brian Frank, a portfolio manager at Frank Capital.
“It seems like the stock has priced in every possible good outcome.”
Among new revenue lines investors expect are a possible Apple Car, alongside growth in service categories such as apps and TV that still remain well below the 65 per cent of the company’s revenues generated by sales of phones, said Daniel Morgan, senior portfolio manager at Synovus Trust Company.
Eclipsing the $3 trillion milestone would add another feather in the cap for Chief Executive Tim Cook, who took over after Steve Jobs resigned in 2011, and oversaw the company’s expansion into new products and markets.
“Tim Cook has done an amazing job over the past decade, taking Apple’s share price up over 1,400 per cent,” OANDA analyst Edward Moya said.
Apple shares have returned 22 per cent per year since the 1990s, while the S&P 500 has returned less than nine per cent annually over the same period.
If Apple hits the $US3 trillion milestone, Microsoft will be the only company in the $US2 trillion club, while Alphabet, Amazon and Tesla have crossed $US1 trillion.
Microsoft, which has a market value of roughly $US2.6 trillion, was the world’s most valuable company as recently as late October when Apple reported supply-chain constraints could weigh on its growth for the remainder of the year.
The emergence of technologies such as 5G, augmented reality/virtual reality, and artificial intelligence may also help Apple and other cash-rich large technology stocks remain in favour with investors as the global economy puts the coronavirus pandemic behind it and supply-chain pressures ease.