Apple is approaching a market value of $ 3 trillion, writes Reuters

Authors Nivedita Balu, Anisha Sircar and David Randall

(Reuters) -The market value of Apple Inc. on Monday it was hovering just below the $ 3 trillion mark, following a staggering string over the past decade that has turned it into the most valuable company in the world.

Shares must gain 4% of their closing price of $ 175.74 per share on Monday to reach $ 182.86 and a record $ 3 trillion in market value after the day fell by just over 2% at the end of the day. It rose about 11% last week, extending its growth of more than 30% for the year as investors remain confident that consumers in the flush will continue to pay the most dollars for the iPhone, MacBook and services such as Apple TV and Apple Music.

The market value of the iPhone maker from $ 2 trillion to nearly $ 3 trillion took just 16 months, as it led a group of large technology companies such as Alphabet (NASDAQ 🙂 Inc and Amazon.com Inc (NASDAQ 🙂 that benefited people and companies that rely heavily on technology during a pandemic.

By comparison, Apple’s move to $ 2 trillion from $ 1 trillion took two years, although its stock growth was faster during that period.

“It is now one of the richest companies in the market, showing the dominance of American technology in the world and how confident investors are that it will remain in Apple’s hands,” said Brian Frank, a Frank Capital portfolio manager who sold his longtime position at Apple. 2019 while stock value rose. “The stocks seem to have had a price in all the possible good outcomes.”

Among the new revenue lines investors expect is a possible Apple Car, with growth in service categories such as apps and TVs that are still well below 65% of the company’s revenue from iPhone sales, said Daniel Morgan, senior portfolio manager at Synovus (NYSE: ) Trust Company.

Eclipsing the $ 3 trillion milestone would add another advantage to CEO Tim Cook, who took office after Steve Jobs resigned in 2011 and oversaw the company’s expansion into new products and markets.

“Tim Cook has done an amazing job over the past decade, increasing Apple’s share price by more than 1,400%,” OANDA analyst Edward Moya said.

Apple shares (NASDAQ 🙂 have yielded 22% per annum since the 1990s, while the S&P 500 had a return of less than 9% per annum over the same period.

If Apple reaches a $ 3 trillion milestone, Microsoft Corp (NASDAQ 🙂 will be the only company in the $ 2 trillion club, while Alphabet, Amazon and Tesla (NASDAQ 🙂 Inc. have crossed $ 1 trillion.

Microsoft, with a market value of approximately $ 2.6 trillion, was the world’s most valuable company only in late October when Apple reported that supply chain constraints could affect its growth by the end of the year.

Big technology stocks rose this year with investors taking advantage of growing demand for cloud-based products as companies switched to a hybrid operating model and consumers upgraded their devices. The index, to which large companies such as Apple weigh the most, has risen by almost 26% this year, while the broader increase is by about 24%.

The advent of technologies such as 5G, augmented reality / virtual reality and artificial intelligence can also help Apple and other major technology stocks rich in cash remain in the favor of investors as the global economy leaves behind a coronavirus pandemic and supply chain pressures ease.

“The Fed’s downsizing and eventual tightening, along with concerns about growth in late 2023, have helped Apple regain its role as a favorite holding company for most investors,” Moya said.