“At its current market value of $756.5 billion – an all-time record for any U.S. stock – Apple alone is worth half of the combined market value of the Internet bubble at the March 2000 peak, according to data from S&P Capital IQ,” Krantz reports. “The fact Apple’s market value is half of the Internet bubble quantifies what many of people suspect – Apple is a one-stock mania. Back in the dot-com boom, investors were infatuated with scores of relatively small companies that in sum amounted to a massive block of the market. Today, that same enthusiasm is concentrated in just a single stock. Apple continues to be the one and only stock many investors care about – creating a single-minded infatuation that rivals historic crazes in the past.”
“Does this mean Apple is necessarily a bubble like the dot-com? No. Apple actually generates profit – actually record profit – unlike the dot-coms that largely lost money,” Krantz reports. “And Apple trades at roughly 18 times its trailing diluted earnings – nowhere near the valuations of dot-coms. And there’s the matter of inflation.”
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