Apple has much work to do to get to magical $1 trillion market cap

“If Apple’s share count comes down to 5.7 billion, Apple needs a share price of roughly $175.44 to have a $1 trillion market cap,” Bill Maurer writes for Seeking Alpha. “However, if the company spends a lot on the buyback and really pushes the outstanding share count down to say 5.25 billion, shares would need to be around $190.48 for that trillion dollar market cap.”

“With Apple trading at around 3.8 times trailing sales, the company would need to get to more than $262 billion in annual sales to hit a $1 trillion market cap. The company still has a long way to go to get to that level, considering where analyst estimates stand currently,” Maurer writes. “The fiscal 2016 (ending September 2016) average revenue forecast is for $223 billion, which is $40 billion more than what Apple did in its most recent fiscal year. The company would need another $40 billion on top of that.”

“Of course, that assumes Apple’s price to sales valuation stays where it is currently, which it probably won’t. As the company grows its revenue base even more, it will be harder to increase revenues at the same rate. For example, 5% growth at $200 billion is an increase of $10 billion in revenues, but the figure is $12.5 billion when the company gets to $250 billion in revenues. If Apple’s price to sales valuation drops to, say, 3.5, Apple would need nearly $286 billion in revenues for a trillion dollar market cap. That figure may not be reached for quite a while, if ever,” Maurer writes. “Apple needs to boost its revenues and net income based on the current valuation if it wants that magical market cap. The market cap still has to expand by more than 43% from Friday’s close. Even if we get a rise in valuation, you’re still talking about sales and net income levels that need to rise quite a bit. I remain bullish in regards to Apple, but the math is quite difficult at this point. Let’s see if a strong holiday quarter can get Apple to an $800 billion market cap first.”

Much more in the full article here.


  1. To simplify, A (price per share) X B (number of shares) = $1 Trillion. If B is smaller, A must get larger or if B is larger, then B doesn’t have to be as large. Except, who ever said that Apple gives a damn about $1 Trillion? Apple has some control over B, but A is the result of the actions of fools and charlatans on Wall Street, which Apple wisely ignores. If $1 Trillion happens, so be it, if not, so be it.

  2. Are people really concerned as to whether Apple reaches a trillion dollar market cap? They must be desperate to find something to write about. Apple’s only job now is to keep selling good products that consumers want to buy. I’m sure Apple never set out to get a trillion market cap like many companies want to have near total market share.

    I suppose if Apple doesn’t reach a trillion dollar market cap there will be questions about Tim Cook’s ability as CEO or how Apple as a company is a failure. It seems as though people are always looking to find fault with Apple when there are so many other struggling companies they can critique. I’d just like Apple to remain a fundamentally solid company even if the market cap doesn’t go much higher. If the market cap just stays at around the $700 billion mark for a year or so, I’d consider that quite an accomplishment.

  3. A $1T market cap is nothing more than an artificial, arbitrary talking point. If/when Apple hits it, it will be there momentarily, then fall back, then move past it, then back, then up, etc. It means nothing, except that Apple is worth more than most countries.

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