California, Jan. 4 (BUS): Apple on Monday became the first company to achieve a $3 trillion stock market capitalization, before closing the day a hair short of the feat, as investors bet the iPhone maker will continue to launch best-selling products as it explores new markets. Such as automated cars and virtual reality.
On the first day of trading in 2022, Silicon Valley shares hit a record intraday high of $182.88, putting Apple’s market cap just above $3 trillion. The stock ended the session 2.5% higher at $182.01, with Apple’s market capitalization at $2.99 trillion, Reuters reported.
The world’s most valuable company has reached a milestone as investors bet consumers will continue to shell out top dollar on iPhones, MacBooks and services like Apple TV and Apple Music.
“It’s an amazing achievement and definitely worth celebrating,” said Jake Dollarhyde, CEO of Longbow Asset Management in Tulsa, Oklahoma. “It just shows you how far Apple is, and how dominant it is in the eyes of the majority of investors.”
Apple has shared a $2 trillion market capitalization club with Microsoft Corp, which is now worth about $2.5 trillion. Alphabet Inc, Amazon.com Inc and Tesla Inc have market values in excess of $1 trillion. The Saudi Arabian Oil Company is valued at about $1.9 trillion, according to Refinitiv.
“The market rewards companies with strong fundamentals and strong balance sheets, and companies that reach these kind of market caps have proven to be solid businesses rather than speculation,” said Scott Wren, chief global market strategist at the Wells Fargo Investment Institute. .
Apple shares have risen about 5,800% since co-founder and former CEO Steve Jobs unveiled the first iPhone in January 2007, far outstripping the S&P 500’s gain of about 230% over the same period.
Under Tim Cook, who in 2011 became CEO after the death of Jobs, Apple sharply increased its revenue from services such as video and music streaming. That helped Apple reduce its reliance on the iPhone to about 52% of total revenue in fiscal 2021 from more than 60% in 2018, satisfying investors worried that the company relied too much on its best-selling product.
However, some investors are concerned that Apple is reaching the limits of how much it can expand its user base and how much money it can squeeze out of each user, with no guarantees that future product categories will prove as profitable as the iPhone.
The rapid adoption of technologies such as 5G, virtual reality and artificial intelligence has also increased the attractiveness of Apple and other major technology companies.
Recent data from CounterPoint Research in China, the world’s largest smartphone market, showed that Apple continued to lead for the second month in a row, beating rivals such as Vivo and Xiaomi.
With Tesla now the world’s most valuable automaker with Wall Street betting heavily on electric cars, many investors expect Apple to launch its own within the next few years.
“The icing on the cake, which could turn into a cake, is the possibility of an electric car,” said Rhys Williams, chief strategist at Spouting Rock Asset Management.
Just as Apple’s market capitalization has reached $3 trillion, its share price as a percentage of the value of the Nasdaq 100 is rising against a major technical level. Recently, the stock price rose above this level and then fell afterwards.
MI