Cody Willard is the manager of a hedge fund and the author of the Telecom Connection, an investment newsletter. He is also a headliner on TheStreet.com, writes for Razor Magazine, VON Magazine and the Financial Times, is a frequent featured guest on CNBC and has been quoted in many publications, including the New York Post and the Hollywood Reporter.
Willard writes for TheStreet.com, “with Apple having blown by Oracle in market cap already, I wonder how much longer before it catches Cisco. Then Intel. Then Microsoft? Let me go ahead and be the one to throw it out there first: I wouldn’t be shocked to see Apple more valuable than Microsoft sometime in 2007. What a mind-blowing thing to think to ponder.”
“Apple’s market cap has gone from $6 billion to $60 billion in the past two and a half years. Can it keep running? If the company delivers the growth it looks like it will: heck yes it can keep running. I’m sticking with it, although I have trimmed the exposure in the past few weeks, as I’ve noted on the site.”
Full article (subscription required) here.
[Thanks to MacDailyNews reader “jalex” for the heads up.]
MacDailyNews Note: Apple’s market value is currently $59,888,758,930, thanks to recent profit-taking. Dell’s, for one example we’re keeping a very close eye on in relation to Apple for obvious reasons, is currently $78,182,273,298. Microsoft’s current market value stands at $287,850,410,220.
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Apple CEO Steve Jobs’ ultimate goal: ‘to take back the computer business from Microsoft’ – June 16, 2005
All together now:
“It’s all about the money, it’s all about the dum dum diddy dum dum…”
I’m all for it. As long as it doesn’t become a lumbering giant. Since Apple doesn’t have a problem sitting on a mountain of cash, let’s go for it…!
As an investor, I’d like to PRESSURE Apple to _use_ some of that market capitalization and $10 per share in cash and invest it in either expanding R&D, purchasing manufacturing facilities, or making acquisitions that strengthem market position and/or open new markets for Apple.
I would prefer Apple had some debt. It would be a tax benefit to write down the interest and mean that earnings were going into growing the company! Perhaps that will come in 2006.
I continue to believe the cash on-hand is part of a larger strategy that is yet to play out. I understand the debt argument, but…
If Apple survives the OS War of 2006
Amazing, I hope this happens than apple can brag “we are worth the most in the world” & “Bigger than M$”
That’s funny twdldee. “If”…
oh god , i hope so
i really hope apple crush microcrap into the dust
If Microsoft would jettison Steve Ballmer it´s stock value would double over night….
o! Apple
o
o
o
G
G
o
o
o
o! Microsoft!
When Steve Jobs came back to Apple it was worth more dead than alive. It was in debt and was bleeding red ink. The college dropout that was run out of town by former PepsiCo CEO John Sculley (84-85) came back with the purchase of NeXT and has turned the company around through the 2000 recession, the bursting of the tech bubble and the post 9-11 economic funk.
During this time Apple has launched OS X (Rhapsody-10.4x), the iLife suite, iTMS, the Final Cut Suite, purchased eMagic (Logic), .Mac, the iPod, the iMac, iBook, the Mac mini, launched the Safari browser ( with help from KDE), launched the xCode Developer tools, the G5 line, and is now starting the transition to x86 CPUs. That’s not a complete list. He has also launched the Apple Retail Chain and completely overhauled their production side, going from a high-cost to a low-cost producer of computers.
The PowerSchool and FileMaker subsidiaries are also doing great things and are moving forward. Not bad. Not bad at all.
Hell of a resume, don’t you think.
The coming war is not going to occur in 2006, but in 2007-2010. Vista adoption by XP users and the continued swell of new Mac users giving up on M$ for their home use will put serious pressure on M$ as this war goes on.
If you look at the history of MS Windows (95-XP), the adoption rate by up-graders has decreased over each successive version. This is where Apple has had the advantage. They have seen an increase with each successive version of OS X in the adoption rate by up-graders.
In the consumer home user space, a user is very unlikely to upgrade the OS if there is no perceived benefit of doing so.
Apple has managed to do so by creating a perceived benefit for laying out the money.
On the Windows side it would be interesting to see if customers are more likely to upgrade the OS by purchasing a copy (not pirating) or buying a whole new machine instead.
I am specifically talking about the home user here for large institutions tend to have institution wide agreements with MS and exist in a dynamic that is quite different than the home user.
that is a heck of a resume…
and do we need to remind what the “genius” CEO said what he would do with apple?
His mindset may make good clones and marketing them well but dell will never innovate… (just like a certain redmond based co. we all know.)
HISTORY LESSON – I couldnt of put it better
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me wrote:
As an investor, I’d like to PRESSURE Apple to _use_ some of that market capitalization and $10 per share in cash and invest it in either expanding R&D, purchasing manufacturing facilities, or making acquisitions that strengthen market position
I respond:
Just this month, Apple did strengthen their market position by spending 1.5 B to partner with various flash chip OEM’s to lock up supplies through 2008 at great prices.
This will prevent the copycats from securing cheap flash memory and therefore make them unable to compete with apple by selling their me-too products cheaper than Apple. Many pundits feel that iPod competitors must sell cheaper than Apple to make market advances.
Apple has effectively cut them off from that route, meaning they can only compete at higher prices (the Creative M) on interoperability, interface, and ease of use. And really, who can beat Apple at that game? I’d say it’s a pretty judicious use of cash on the part of Jobs and co.
And, who knows what else, beyond iPods, the deep thinkers at Apple have planned for all those flash chips? For what other products might they want to get a two year head start on those competitors who ride the coattails of Apple design?
The future is bright .
Microsoft’s current market value stands at $287,850,410,220
That’s a billion dollars more than Switzerland’s GNP.
Amazing that a single corporation can hold more value than a WHOLE FRIKKIN’ NATION!! We’re not talking about some backwater third-world bananna republic, we’re talking about the banking center of the industrialized western world…
I don’t think Apple was ever in debt in its entire history, even during the darkest days of Michael Spindler. Can somebody confirm or deny that?
Screw Microsoft! It’s just a software developer! It should have never been allowed to get where it is and only got there illegally. The result has been to ghettoize the entire industry.
As the name implies, I am a Linux Guy. I started with the Mac, but was forced to go with Windows for practical professional reasons. Then I moved over to NeXt, at home at least, and then to Linux when NeXt became moribund.
But back in my Mac phase, I made the biggest investment bet in my life — AAPL. I never sold, hoping that than ounce of intelligence would infect an Apple CEO to take the most creative company and make it soar.
Now I feel like Meg Ryan in that scene in “When Harry Met Sally.” My wife almost fainted when I told her what the stock she wanted me to dump was worth.
I happily agree with the author. Apple might just well keep growing at a spectacular rate and blow past MS. Yes, yes, oooooooo, ooooooweeeeeeee ….
Sounds very unlikely. Much as I am a fan of Apple, for this prediction to come true, Microsoft would have to stand still, or start to lose value.
Let’s assume that MS dips from 287B to 200B. Apple would have to more than triple to hit that point in two years.
Possible? Yes. Probable? Learn from history.
I used to own a lot of AOL shares that were at $95 in December 1999. I thought I was retired. I made the mistake of holding on to them. I didn’t recognize the bubble.
Apple is ahead of itself. Don’t assume that the stock will sustain this rate of growth. If you have shares, protect them. Don’t make the mistake I made with AOL. Fortuneately, Apple is in much better hands than Case, Schuler, and the other idiots that were running AOL/Time Warner circa ’99-03.
I don’t think Apple overtaking Microsoft in value is all that farfetched. As Apple gains share, Microsoft, by definition, has to lose share. The loss of share, even in the face of good earnings, will cause MSFT to decline in value (perception of future value equation). So Apple does not have to gain $220 Billion in value to overtake Microsoft. The transition could happen with a gain of just $140 billion. Not unreasonable considering Apple’s leadership in music, positioning in video and expanding CPU share.
Having said all that, I would be more comfortable with a forecast of 2008. 2007 is pretty aggressive.
I’m not sure about catching M$, but I do think Apple can definitely pass up Dell’s market cap by 2007. And what a glorious day it will be when Mikey boy has to eat that HUGE plate of crow…
Apple did have some debt, and I recall Steve making an announcement to the employees about paying it in full while I was there. I think that was close to two years ago.
Also speaking as an investor, I’m happy to see Apple sitting on a large war chest. The deal for flash memory supplies was a great move, and it probably wouldn’t have been prudent if Apple’s cash balances weren’t so high.
There’s really no such thing as excess cash. That money makes it possible for Apple to make bold moves, like launching the iPod or the Mac Mini, or building out the server capacity to make the video store possible. I don’t know what else they’re developing, but I’m quite sure that Apple’s future product plans aren’t scaled back from what they’ve done already.
I’m very long on AAPL, and I just bought another 500 shares in the dip that the recent analyst downgrades caused. (bought at 70.85, and I’m already up over a dollar from that.)
As for Apple overtaking MS, I do see that coming, and the trigger for it will be Windows Vista. That product is SIX YEARS late, and they’ve dropped so much of the highly-touted feature set that it’s barely more than XP with a couple of new skins. Once the customers discover that Vista is still the unsecureable mess that Windows has always been, we will have reached the tipping point.
MS is also suffering a brain drain. The “get rich at MS” story depended on a constantly rising stock price, and they’ve been flat for years now. Any top engineer who chooses MS over Google or Apple, or even any of the latest round of start-ups, is just wasting his talent.
I’ve read what MS’s new CTO is saying, and frankly, I’m underwhelmed. XML? AJAX? RSS? Running Word and Excel as a web service? Give me a break! Those clowns are completely out of ideas, and they can’t even figure out how to copy Google.
Apple worth more than MS? Hell, yes!
-jcr
The coming OS war may be the real reason that Apple is switching to Intel processors. Microsoft’s Vista means a lot to all the PC makers (Dell, HP, etc) because it will trigger an upgrade cycle as all those corporate users buy newer, faster computers to run the new operating system.
This is Apple’s big chance to make a real dent in the market – all they have to do is convince some of those “upgraders” to switch instead to a Mac. By using Intel-based hardware, the new switchers can taste the Mac, but still have the option to revert to MS Vista if things don’t work out.
This could sell a lot of Apple hardware. Alternatively, Apple could license OS X to PC makers to compete head-to-head with MS during this upgrade cycle.