Apple becomes first US company to touch $3 trillion market cap

The company was the first to achieve this milestone, however it failed to stay above the level by the end of the trading day. It closed 2.5% higher at $182.01 and a market capitalization of $2.99 ​​trillion. The advance came on a broadly positive session for stocks, where Apple and Amazon.com Inc. Both contributed to the outperformance of the Nasdaq 100 Index.

The iPhone maker’s stock price has been rising steadily over the years, dropping more than 200% since Covid first sent the world into lockdown in early 2020 and the need for technology to help work, education, entertainment and stay connected. Centrality was underlined.

Apple’s rally comes with steady revenue growth and bets that flagship products have a strong long-term outlook with new offerings like virtual reality headsets and autonomous electric vehicles.

Patrick Burton, co-portfolio manager of Mainstay Winslow Large Cap Growth Fund, said, “I never thought I’d see a market cap of $3 trillion, but it really speaks volumes about Apple’s prospects over the next five to 10 years.” ” 2.75 million Apple shares. “We feel very good about the outlook, and continue to see meaningful opportunities ahead with a stable iPhone franchise and growth drivers from both services and new products.”

The stock reached $1 trillion for the first time in mid-2018, and achieved a $2 trillion valuation in August 2020. While it was the first US company to exceed that level, Saudi Aramco was the first $2 trillion company overall. Apple’s size means it has a clear impact on the overall equity market; It weighs about 7% in the S&P 500 Index.

Ever since it first became the world’s most valuable stock in 2011 — when its market cap was less than $340 billion and comprised about 3.3% of the S&P 500 — Apple has rarely shied away from the title. It was Microsoft Corp. in October. It was briefly lagging behind, after warnings about the impact of supply-chain issues would be on its holiday quarter, though second-place’s position was short-lived. Over the past month, the stock has gained more than 12%, compared to a 3.6% rise at Microsoft, which now has a valuation above $2.51 trillion.

high premium

Despite the optimistic outlook, there are risks to Apple going forward.

The company is facing the toughest regulatory environment in its history, with governments in the US and India impacting its App Store practices and dealings with third-party developers. Any law affecting Apple’s practices could limit its income from services, which is now one of the company’s most important areas.

From a product point of view, Apple is also competing with new rivals. The company’s upcoming virtual and augmented reality headset will compete with Meta Platforms Inc., formerly Facebook’s Gear. Its long-developing car project has also hit odds with ever-changing goals and major departures.

According to data compiled by Bloomberg, Apple’s advance also has stocks trading at a premium to its average historical multiplier. The stock is 4.5% above the average analyst price target, suggesting that about 80% of firms recommend buying it, with most considering it quite valuable.

“It’s not particularly cheap right now, so I wouldn’t back up the truck to buy, but it must be something expensive,” said Rhys Williams, chief strategist at Spouting Rock Asset Management. “As long as the iPhone cycle is sustained, it’s unlikely to outperform the market significantly, and if it does come with an electric vehicle, the stock will look cheap because it’s a huge potential market.”

This story has been published without modification in text from a wire agency feed. Only the title has been changed.