Apple became the first company with a market capitalization of US$3 trillion. In less than 16 months, the stock price of large technology companies rose by US$1 trillion due to the coronavirus pandemic.
The iPhone maker became a $1 trillion company in August 2018, and two years later it became First company Valued at 2 trillion U.S. dollars. On Monday, the company’s stock price rose 3% to US$182.86, surpassing the latest milestone, before falling back to US$182.
Apple briefly lost its title as the world’s most valuable company Microsoft At the end of October. However, the strong rebound in November regained the crown. Then it soared to the end of 2021, and its market value increased by $500 billion since November 15.
Only a few companies are worth more than $1 trillion, including Tesla and Amazon. Google’s parent company Alphabet and the oil group Saudi Aramco are valued at approximately US$2 trillion, while Microsoft’s market value is approximately US$2.5 trillion.
Apple’s stock price has risen by more than 30% in 2021 Navigate cleverly This supply chain Crisis, and benefited from the additional demand for iPhone, Mac and iPad when customers upgrade their home offices during the pandemic.
After Morgan Stanley analysts raised their 12-month target price to $200, the stock rose in early December on the grounds that investors have not yet set prices for the expected launch of augmented reality and virtual reality devices.
Moody’s also upgraded Apple to an AAA-level company in December last year, making it the third AAA-level company evaluated by a rating agency, alongside Microsoft and Johnson & Johnson. S&P Global still rated Apple as AA+, one level lower than AAA.
DA Davidson analyst Tom Forte said that investors’ enthusiasm for Tesla and electric vehicles has also spread to Apple’s stock, hoping that the iPhone maker can enter the automotive industry within the next five years.
There has also been a lot of activity around Apple In the derivatives market, Because traders bet that the stock will continue to rise.
Under the leadership of Tim Cook, Apple’s market value increased by nearly $2.7 trillion in ten years, a feat that caused those who questioned his qualifications after he succeeded Steve Jobs The critics were surprised.
Cook’s success is based on his behind-the-scenes ability to manage the supply chain and mass sales of products, while resisting regulatory and political threats in Washington, Brussels, and Beijing.
“Cook is seen as a safe but rather conservative bet,” said Benwood, principal analyst at CCS Insight. “But what he delivered was simply amazing. He made the iPhone franchise the most profitable consumer electronics product in history.”
Morgan Stanley analyst Katy Huberty pointed out that in the past five years alone, Apple’s stock price has risen by about 500%, outperforming the Standard & Poor’s 500 Index, which has risen by about 105% over the same period.
Therefore, according to DA Davidson’s data, Apple’s current price-to-earnings ratio is at a historical high above 30, which is higher than the three-year average of 23.4.
But few analysts believe that the stock is in a bubble zone. According to Bloomberg News, among the 45 analysts who follow Apple, 35 think they are buying and 2 think they are selling.
The bullish outlook reflects how Apple was revalued by Wall Street to explain its swelling high-margin services business, which brings recurring revenue and gets rid of its dependence on iPhone replacement cycles.
Apple’s revenue exceeds $1 billion in revenue per day In the fiscal year ending in September, there are now 745 million paying users using a growing range of services, including music streaming, on-demand video and fitness, and warranty coverage.
Last year, its service business revenue was close to 70 billion U.S. dollars, twice the amount four years ago. According to data from Evercore ISI, in the last quarter, the division’s profit margin reached a record 70.5%, more than twice the profit margin of hardware sales.
One of the biggest risks facing Apple and its stock price is that the pillars of the service business are overturned by policy changes.
Washington’s legislators estimated 8 billion to 12 billion U.S. dollars in payments Alphabet pays the price every year for making Google search the default setting on its devices, while others are targeting the Apple App Store business model, which cuts certain transactions by 15-30%.
So far, Apple has been relatively safe and sound. In the United States, Epic Games Sue it Last year due to suspected illegal monopoly operations, Epic lost 9 out of 10 charges. When Apple appealed the loss, the higher court approved its request and postponed the lower court’s order to open the App Store to rival payment platforms.
At the same time, Apple has substantially diversified its hardware products to AirPods, Apple Watch and other accessories.
Huberty pointed out that the “wearable device” market like Apple Watch hardly existed in 2014, but it is now a “$38 billion business-the size of a Fortune 120 company”.
Additional reporting by Joe Rennison and Eric Platt in New York