Apple became the first-ever public company to reach $3 trillion in market value after the stock rallied 3% Monday.
The milestone is based on intra-day trading, during which Apple shares briefly crossed the $3 trillion value. Apple (ticker: AAPL) would need to close above $182.86 to hold onto the mark.
It’s been just shy of 500 days since Apple first hit the $2 trillion level on Aug. 20, 2020. Over that period, Apple has added $2 billion a day on average to its market value, if you include weekends. It’s been about 1,250 days since Apple hit $1 trillion for the first time in August 2018.
Apple shares rose 34% in 2021, after a gain of 81% in 2020.
Microsoft (MSFT), which rallied 58% in 2021, is the No. 2 company by market value with a recent market cap of $2.57 trillion and the only other one above $2 trillion. Just three other stocks— Alphabet (GOOGL), Amazon.com (AMZN), and Tesla (TSLA)—have valuations above $1 trillion.
In the fiscal fourth quarter ended Sept. 30, Apple’s revenue was $83.4 billion, up 29% from the year-ago quarter. That included $38.9 billion in iPhone sales, up 47% from a year earlier, and services revenue of $18.3 billion, up 26%. In the quarter, Apple posted $9.2 billion in Mac sales, $8.3 billion in iPad sales, and $8.8 billion in wearables, including Apple Watch and AirPods.
It’s now been just over a decade since Tim Cook succeeded Steve Jobs as CEO. The stock has appreciated 1,474% since Cook took the reins. About 94% of the company’s market cap has been amassed with Cook at the helm.
There are multiple reasons for Apple’s latest rally, including strong demand for its latest iPhone. Analysts had seen the iPhone 13 lineup as an interim step—not nearly as important as the iPhone 12, the first to include 5G connectivity. But as was the case with the iPhone 11, Wall Street seems to have underestimated demand for the iPhone 13. In particular, there has been a historically high demand for the new phones in China, setting the stage for a potential December-quarter earnings surprise.
Another factor: Apple has become a haven for tech investors in a turbulent market, with growing demand for both Macs and iPads. That demand for Apple products has stayed strong even as the world begins a complex return to normalcy. Meanwhile, Apple continues a shareholder-friendly policy of aggressively buying back its own shares, which has helped push shares higher in recent years.
Finally, Wall Street has begun to factor in two yet-to-be-announced new product categories—augmented- and virtual-reality headsets and autonomous vehicles—to its Apple financial and valuation models. Morgan Stanley analyst Katy Huberty wrote in a recent research note that Apple shares “don’t seem to bake in the impact from upcoming new product launches,” despite a consistent record of innovation.
For the September 2022 fiscal year, Wall Street analysts are forecasting revenue of $382 billion, with a push above the $400 billion level in fiscal 2023.
Source: Barron's