Apple is primed to become the first trillion-dollar company

“Apple Inc. has been one of the best performing stocks over the past decade, and could even arguably be considered the most successful company in history,” Victor Dergunov writes for Seeking Alpha. “Since bottoming out in 2008 at a split adjusted $12 a share, the stock has skyrocketed by more than 1,300% over the last nine years, and now holds the top spot in market cap value over any other publicly traded company in the world. Right now, Apple’s market value stands at roughly $895 billion, and given that the company trades at a relatively low P/E ratio, has a favorable market position, and is likely to continue to deliver double-digit growth, Apple could very well become the first publicly traded company to be valued at a trillion dollars.”

“Services revenue came in at $8.5 billion in Q4, and hit an impressive $30 billion for full fiscal year 2017. Moreover, Tim Cook said the company is well on its way to achieving its projected $50 billion sales target by 2020 in its services segment,” Dergunov writes. “Diversifying revenues from the iPhone is tremendously important for Apple, as this makes the company a true powerhouse in the technology industry instead of simply a predominant smartphone manufacturer.”

“The Macintosh unit is performing stronger than ever, and Mac revenues surged by 25% yoy in the last quarter. Moreover, the unit was responsible for 13.64% of total Apple sales, up from just 12.25% in Q4 2016… as consumers continue to expect great products, gravitation towards Mac computers should continue going forward,” Dergunov writes. “Based on the fundamental statistics, Apple is extremely cheap right now. The company has a double-digit growth rate, provides a dividend, and is trading at just 15 times next year’s average EPS estimates. This essentially makes Apple one of the cheapest stocks in the S&P 500 on a relative basis, given that the S&P 500’s P/E ratio is roughly 25.”

Read more in the full article here.

MacDailyNews Take: Apple remains amazingly undervalued and water is wet.

Maybe when Apple’s market cap hits $1 trillion, the jolt will wake up Mr. Market?

Would that Steve were here to see Apple achieve a trillion-dollar market value!

SEE ALSO:
Apple: First trillion dollar baby? – August 4, 2017
Why Apple’s market cap is going to $2 trillion – August 2, 2017
Analyst: Apple to become world’s first trillion dollar company within 12 months – July 7, 2017
How Apple’s market value gets to $1 trillion – May 23, 2017
Gene Munster: Why Apple deserves an historic trillion-dollar valuation – May 22, 2017
Analyst sees Apple’s market value at $1 trillion in a year – May 8, 2017
Apple’s path to first-ever $1 trillion market cap – March 7, 2017
Apple on track to become first ever $1 trillion company – February 17, 2017
Bernstein: Apple could be first to $1 trillion market value, propelled by services revenue – Cramer agrees – May 18, 2016
Apple would be worth $1 trillion if market valued it like Steve Jobs-run company – January 4, 2016
Analyst: How Apple’s market value hits $1 trillion in 2016 – November 10, 2015
Annual iPhone Upgrade Program could power Apple to become world’s first $1 trillion company – September 16, 2015
Analyst: Apple at $1 trillion in a year – May 11, 2015
Dream of $1 trillion valuation for Apple slips away – April 17, 2015
Second analyst sees Apple worth $1 trillion – April 17, 2015
Here’s how Apple gets to $1 trillion valuation in just 12 months – March 23, 2015
Apple eyes trillion-dollar market cap – February 24, 2015
Apple’s stock swoon just a blip on its way to being worth $1 trillion – December 2, 2014
Trillion-dollar baby: Can Apple go where company has gone before? – November 24, 2014
Is Apple about to be the first $1 trillion company? Carl Icahn says yes – November 18, 2014
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
How Apple can reach $2 trillion market value in 2016 – March 16, 2012
Apple: $1 trillion market cap inevitable? – February 21, 2012
Could Apple become world’s first trillion-dollar company? – January 28, 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

18 Comments

  1. The really big investors don’t think Apple is undervalued, at all. If anything, they seem to believe Apple is overvalued compared to Amazon, Alphabet or any major tech company, including Microsoft. Just yesterday CNBC trotted out some analysts saying how Apple is facing nothing but headwinds and that there’s no real momentum behind the iPhone X. I think Apple just touched a P/E of 19 the other day and that’s likely as high as it will ever go. Meanwhile, Microsoft has a P/E of 28 which is likely to go higher. Wasn’t Microsoft supposed to be a dying company after Windows started losing traction and their mobile initiative fell flat? That had to be one of the fastest turnarounds of all time. Microsoft is now given better prospects than Apple due to Microsoft’s Azure Cloud business.

    I don’t think Apple has ever been off the doomed company list for years which seems absolutely crazy. Even as Apple is growing its Services division, the big investors are still immensely worried about the company’s revenue growth. All I ever hear is that there’s nothing beyond the iPhone. I’m curious to see when Apple repatriates that overseas cash if Wall Street will change its perspective of Apple being doomed. I wouldn’t count on Wall Street turning positive on Apple. All the FANG stocks are considered far more valuable than Apple in terms of growth prospects.

    What I do hope if Apple reaches a $1T market cap is that it stays there for at least a couple of years. I sure don’t want to see the stock collapse in a heap once that mark is reached.

    1. According to the financial info I just looked at Alphabet’s highest cap was just north of 700 billion and Amazon was about 570 billion. Of course Saudi Aramco has been a multi trillion dollar company for years already but they’re not a public company

          1. In a sense, is it even a company, in the sense we mean “company”. GDP is an average of $223billion since 1968. More than merely privately owned, it is a large percentage of the output of a country and owned by the rulers of that country.

            1. That’s a good point. Saudi Aramco is basically a state controlled/owned entity. Still, it’s technically a company and it has been worth more than a trillion dollars for many years. But you’re right, it’s not a company in the normal sense we’re talking about. Apple reaching a trillion dollar market cap is a remarkable accomplishment. I have no doubt it’s going to happen fairly soon.

  2. I’m so tired of seeing this headline, well simply because it’s WRONG.

    Apple will NOT be the first trillion dollar company. Apple will be the first US trillion dollar company. Petro China has already hit the 1 Trillion $ mark in 2007.

    Then if you inflation adjust a few companies in the past, apple goes farther down the list. The Dutch East India Company, adjusted for inflation, would have a value of $7 trillion in todays’ dollars. It paid a 18% annual dividend to its shareholders for almost 200 years. Replicate that performance and it would be, Apple who?

    So please stop with all the hype.

    1. Comparing Apple to PetroChina is extremely misleading. First, PetroChina only briefly broke 1 Trillion in valuation when it first went on the market. However, only 2% of PetroChina went on the market and that market cap was multiplied by 50x to get the valuation of 1 Trillion. Also it quickly dropped down rapidly immediately after the IPO.

      If Apple breaks 1 Trillion, it’s going to do so much more legitimately, and hopefully sustain that level, even breaking PetroChina’s temporary high blip.

      Adjusting for inflation… that’s a little tricky if you’re going back to the 1600-1800 time period. But while certainly VOC would be worth more however one calculates inflation, there’s something to be said for leaving inflation out of it and just seeing that a new high has been reached.

      “It paid a 18% annual dividend to its shareholders for almost 200 years. Replicate that performance…”

      You’re neglecting the fact that VOC operated on slave labor and trade, caused entire species to go extinct, caused massive deforestation and other environmental issues, not to mention multiple wars. Also worth mentioning is that while the company lasted about 200 years, its valuation peaked at the 100 year mark.

      1. Adjusting for inflation is really not tricky.

        You’re neglecting that slave labor was acceptable in that time of VOC. But, Apple has used near slave labor in building their products. The abuses of people who build Apple products is not a secret. Uses tricks to hide money, etc. etc… Different times different tricks.

        Apple a nearly trillion dollar company, sitting on a massive cash hoard and has a pitiful yield.

        A value of $7 trillion leaves a lot of room for silly attempts to do the Apple is the first trillion dollar company dance.

        1. “Adjusting for inflation is really not tricky.”

          Yes it is. What exactly is the formula for converting dollars from the 1600s to 2017 dollars?

          Most often the formula is based on the CPI, of which the largest component is gasoline… which didn’t exist in the 1600s. Automobiles are another component as are other durable goods that didn’t exist back then.

          Meanwhile some of the things that did exist back then are priced much lower today due to increases in productivity.

          However you want to measure inflation, the context of the goods and services in the 1600s is vastly different today.

          “You’re neglecting that slave labor was acceptable in that time of VOC. But, Apple has used near slave labor in building their products.”

          There’s a huge difference between directly owning large numbers of slaves and actively being engaged in the trading of slaves as a basis of the profit, and contracting out to companies that have harsh work conditions and low wages relative to the developed world.

          “A value of $7 trillion leaves a lot of room for silly attempts to do the Apple is the first trillion dollar company dance.”

          Right, and again, I’m not arguing that adjusted for inflation Apple will be the first, but rather that it’s a milestone in of itself, and if you’re going to adjust for inflation, the “title” becomes meaningless because there’s no common agreement on exactly how much VOC would be worth in today’s dollars.

          Technically, adjusted for inflation, VOC would be worth zero dollars… it reached that level in 1800.

          Even if you were to measure inflation based on the value of something being based on the average wages at the time, this becomes a false measurement (for great periods of time like this) because there are huge discrepancies in class populations.

          “Apple a nearly trillion dollar company, sitting on a massive cash hoard and has a pitiful yield. “

          I’d totally agree with that, and further that’s why its PE ratio is so low. So much of APPL isn’t Apple as a business but the return on the cash earning a low return. That’s why years ago I was arguing in favor of dividends back when others here claimed it would be the end of Apple.

  3. What some of us working folks would like to know is in what 3rd world country shell company Apple intends to stash their cash.

    Capital is no indication of quality or worthiness.

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