“Apple is the most valuable company in the world. Nobody else comes close,” Paul R. La Monica reports for CNNMoney.
“It is worth more than $670 billion. Stop and think about just how iNormous that is for a second,” La Monica reports. “Apple has a $260 billion market value lead over key rival Microsoft and is worth $300 billion more than Google, another big competitor.”
“pple’s market cap is $185 billion higher than the combined market values of all 20 companies in the Dow Jones Transportation Average, an index that includes well-known blue chips such as FedEx, UPS, Union Pacific and Delta,” La Monica reports. “So how much higher can Apple’s stock climb? Could it one day be worth more than $1 trillion? Legendary investor Carl Icahn thinks so.”
Read more in the full article here.
MacDailyNews Take: It’s déjà vu all over again.
Related articles:
Omega’s Einhorn: Apple’s market value could hit $1 trillion – November 18, 2014
Apple’s market value primed to go to $1 trillion, creating largest company in history – July 3, 2012
Apple at $1,111 per share with a $1 trillion market cap in the next year – April 26, 2012
Piper Jaffray ups Apple price target to $910; sees world’s first trillion-dollar market cap – April 3, 2012
Altucher: Apple will become a trillion-dollar company; $1,000 a share – May 3, 2011
Apple could become first $1 trillion company in as little as 36 months – April 14, 2011
Why Apple will be the first company to achieve a trillion dollar market cap – December 30, 2010
Carl Icahn will say anything that will increase the net worth of his Apple stock. Of course he’ll say it will be a $1 Trillion company. If he said he thought Apple had already topped out, the stock price would either tumble or flatline. Asking Icahn for his opinion on Apple’s future stock price is of much, much less value than asking Tim Cook. At least Cook has the legal responsibility to not intentionally lie to investors. Icahn can say almost anything he wants that will increase the value of his stock and get away with it.
Articles like this scare me. Why? Because the cheerleading and hype over stocks and markets can force these to get ahead of themselves. I’m reminded of the euphoria of the Dot-Bomb era in the late 90s. Like Icarus, WIRED Magazine flew too close to the sun, and breathlessly ran a cover story, “DOW 20,000!!!!” Not long afterward, the market plunged.
I worry about irrational exuberance among investors, and hype meant to pump up any stock, Apple included. Market cap makes for great headlines and click-bait, but means little. As an investor, I am happier with manageable stock price growth, not growth prompted by fools.
Never buy a stock because it’s hot. Buy shares of a company because they are a good value and bargain, and because the company’s fundamentals are solid, and growth is as well. Buy a stock with the intent to own in through market cycles and for many years. If you do, you will come away a big winner many years from now.
There is no effective get-rich-quick scheme. The really successful investors got that way with patience to hold on to good companies when sentiment runs against them (as happened to Apple just over a year ago), and to buy stocks when the pundits are slamming them or dismissing their prospects. But ignore stories like the one above. They are meant only to sell subscriptions.
Interestingly, while Apple’s market cap is massively higher than companies such as Microsoft, Google, Fedex, and UPS, its earnings are also massively higher. In fact, as a multiple of earnings (P/E), it’s cheaper than all of these stocks. apple currently trades at about 17.75X earnings, Microsoft at about 19X, and the rest are over 20X earnings.
So is safe to say that whoever calculates the Price/Earnings figures has gotten AAPL all mis-calculated, or is it that AAPL is a mature stock now with no room for growth?
I’m always confused by the P/E valuations, they seem to contradict reality.
I also never can quite figure out those P/E valuations. I don’t see what makes Apple any worse than Google or Microsoft to give it a lower P/E. It only seems Apple’s gross margins are lower than those other two companies? And then there’s also Apple’s lower market share?
When I see Microsoft and especially Google with such high institutional ownership compared to Apple, that really is a puzzle to me. Something must be scaring institutional investors at some level to ignore Apple like that.
“I also never can quite figure out those P/E valuations.”
That’s why they call it financial engineering.
The main issue is the fear or assumption that Apple’s earnings will collapse as soon as people discover that all their toys are just shiny metal with Apple logos, and that everyone will flee to cheaper offerings from competitors as all the markets Apple competes in inevitably become commoditized, and meanwhile Apple’s new big thing flops and they have no way to maintain their massive profits, revenues and etc.
It’s about as rational as expecting MS earnings to collapse as people stop buying Windows and Office. In fact, that seems like a more likely outcome, although still not very probable.
They are wondering what comes next after the iPhone 6? The company is selling lots and lots of phones of this new release, the majority of the company’s revenue, but then what? What else can they sell to sustain this large market cap revenue growth rate? It may be a valid concern given the significant rise in the stock over the past six months. In a few ways, the situation is akin to Fall 2012, when large investors abandoned the stock after a significant rise because they thought there was not much exciting beyond the iPhone 5, that Samsung was gaining share and producing comparable products, and they lost confidence in the post-Jobs era company. Some large investors now fear competition beyond Samsung to include the rising Chinese companies like Xiaomi because Apple’s sales growth depends so much on the China market.
For , these are the good ol’ days.
What would I do? I’d shut it down and give the money back to the shareholders.
I vividly remember a few people making this same statement in 2012 before The Great Apple Share Price Collapse took place. I’m not saying it was Apple’s fault but whenever the vultures of Wall Street see an opportunity to knock Apple down, anything can happen. Apple was solid then but certainly not as solid as it is now.
Apple Pay and a concentrated push into the enterprise will be hard for Wall Street to simply ignore. They’ll keep trying to throw out the “massive” drop in iPad sales to devalue the company. Why that is stupid is because consumers are probably buying the larger and more expensive iPhone 6+ to substitute for a tablet which would easily make up the loss of iPad sales.
I’m not going to get carried away about a trillion dollar market cap. I want Apple to be around and stay relevant for a long time to come. Apple has already exceeded all my investment expectations so anything extra is merely icing on the cake. I really can’t understand those greedy investors who aren’t satisfied with Apple and yet will throw money at companies that only offer some future promise.
Apple may become the first company ever to have over 1 trillion speculative statements made about whether it will become the first $1 trillion company.
When you want to unload your stock at the top of the market, cry out to anyone who will hear it and say “AAPL could go 50% higher.” Or in other words, please buy my stock while it is still high priced.
Watch for the AAPL market to fall when the Watch is released to the public. The pundits will say that the new product was ‘already baked into the price’ and this is just a bit of ‘capital preservation’ by the market.