Earlier this week, Apple became the first company to reach a three trillion-dollars market capitalization. Putting that into some sort of context, that's the equivalent of almost 11 Disneys, 6 JP Morgans or 3 Facebooks. In fact, according to the NYT, Apple is bigger than "Walmart, Disney, Netflix, Nike, Exxon Mobil, Coca-Cola, Comcast, Morgan Stanley, McDonald’s, AT&T, Goldman Sachs, Boeing, IBM and Ford" combined. The company accounts for 7% of the total value of the S&P 500.
Apple's three-trillion milestone is also remarkable for how quickly it happened. It took Apple 42 years to be worth $1 trillion. Then took only 2 years to cross the $2 trillion mark and just 16 months to reach $3 trillion. (Click image to enlarge)
Source: NYT
Sure, almost $500 billion of share-buy backs in the last few years have helped to goose its stock price; but more importantly Apple has become, enviably, both a safe-haven for investors in periods of stress and a growth company in good times. A company for all seasons.
Apple's biggest source of revenue is, of course, still the iPhone, but the business is so much more as we noted in prior post. Driving growth is its services business that has a 70% operating margin and is poised to be worth $1.5 trillion alone. Now is there is also a certain bit of hype backing the $3T valuation, with investors believing Apple will keep launching best-selling products as it explores new markets like self-driving electric cars, augmented-reality glasses and possibly the Metaverse. That's a lot of game-changing technologies. Any company would be lucky to make even one work, let alone two or three. We shall see.
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