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Apple nears $3 trillion market value | Business Section

(Reuters) — Apple Inc’s market value surpassed the $3 trillion mark on Monday, after a stunning run over the past decade that made it the most valuable company in the world.

Shares of the company fell just over 2% on Monday to close at $175.74, reversing earlier gains that had seen them approach the $182.86 price needed to register a market value of $3,000. billions of dollars.

Apple’s stock rose about 11% last week, extending its year-to-date gain of more than 30% as investors remain confident that greedy consumers will continue to pay top dollar for iPhones. , MacBooks, and services like Apple TV and Apple Music.

The iPhone maker’s march from $2 trillion to nearly $3 trillion in market value took 16 months as it led a group of megacap tech companies such as Google-parent Alphabet Inc and Inc that have benefited people and businesses heavily reliant on technology during the pandemic.

By comparison, Apple’s move from $1 trillion to $2 trillion took two years.

“It is now one of the most valuable companies in the market, which shows the dominance of American technology in the world and the confidence of investors that it will remain in the hands of Apple,” said Brian Frank, portfolio manager at Frank Capital, who sold his long-standing position in Apple in 2019 as the stock’s valuation rose. “It looks like the action has priced in all possible good outcomes.”

New sources of revenue expected by investors include a possible Apple car, as well as growth in service categories such as apps and TV, which remain well below the company’s 65% revenue from sales. of iPhones, said Daniel Morgan, senior portfolio manager at Synovus. Trust company.

Eclipsing the $3 trillion mark would add an extra feather to CEO 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 incredible job over the past decade driving Apple stock price up more than 1,400%,” said OANDA analyst Edward Moya.

Apple stocks have returned 22% annually since the 1990s, while the S&P 500 has returned less than 9% annually over the same period.

If Apple hits the $3 trillion milestone, Microsoft Corp will be the only company in the $2 trillion club, while Alphabet, Amazon and Tesla Inc have passed the $1 trillion milestone.

Microsoft, which has a market value of around $2.6 trillion, was the world’s most valuable company as recently as late October, when Apple signaled that supply chain constraints could weigh on its growth for the rest of the year.

Big tech stocks have rallied this year as investors tap into growing demand for cloud-based products, companies shift to a hybrid working model and consumers upgrade their devices. The Nasdaq 100, which is most weighted by big companies like Apple, is up nearly 26% this year, while the broader S&P 500 index is up about 24%.

The emergence of technologies such as 5G, augmented reality/virtual reality and artificial intelligence may also help Apple and other large, cash-rich tech stocks stay in investors’ favor as the global economy puts the pandemic on hold. of coronavirus behind it and supply chain pressures ease.

“I’m in the camp experiencing another ‘Super Cycle’ with the iPhone12/iPhone 13 franchise,” Daniel Morgan, Synovus Trust Company Senior Portfolio Manager, wrote in a note. “And that AAPL takes off for another set of quarters with strong revenue and profit growth.”