Technology

Apple breaches $3 trillion market value again

Apple’s shares rose to as much as $182.94 and need to finish above $182.86 to record the milestone on a closing basis

The Apple logo: the company breached the €3 trillion valuation mark this week. Photograph: Mladen/Antonov/AFP via Getty Images

Tue Jan 4 2022 - 17:35

Apple crossed $3 trillion (€2.66 trillion) in market value in early trading on Tuesday before slipping, after the world’s most valuable company briefly hit the milestone a day earlier.

The iPhone maker’s shares rose to as much as $182.94 after opening flat at $182.63. Shares need to finish above $182.86 level to record the milestone on a closing basis.

Apple contracts were the second most actively traded US stock options on Tuesday after Tesla,according to the Options Clearing Corp (OCC) data from early morning trading. The contract with the highest open interest is January 20th call option with a strike price of $200, Refinitiv data showed.

Apple accounts for nearly 7 per cent of S&P 500 index’s value, according to Refinitiv data, the highest for a single stock on the index at a time when the benchmark is perched at a peak.

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Rising valuation

The pandemic fuelled demand for iPhones, MacBooks and iPads helped push the company’s market capitalisation past $2 trillion in August 2020 and add another trillion 16 months later.

“Apple has been one of the key pandemic trades for a lot of people and as we exit the pandemic... the iPhone maker is going to struggle a little bit,” said Edward Moya, senior market analyst at Oanda in New York.

“The next big product breakthrough is nowhere near. It’s going to be a lot harder for Apple to get to four and five trillion than it was for it to go from two to three.”

Apple’s market value has now grown almost $2.7 trillion in a decade under Tim Cook’s leadership, a feat that surprised critics who questioned his credentials after he took over from Steve Jobs.

Mr Cook’s success has since been built on his behind-the-scenes ability to manage supply chains and sell products in huge numbers while warding off regulatory and political threats in Washington, Brussels and Beijing.

“Cook was seen as a safe but rather conservative bet,” said Ben Wood, chief analyst at CCS Insight. “But what he’s delivered is nothing short of astonishing. He has made the iPhone franchise the most lucrative item of consumer electronics in history.”

Morgan Stanley analyst Katy Huberty noted that Apple’s stock price has increased about 500 per cent over the past five years alone, outperforming the S&P 500, which had gained about 105 per cent over the same period.

Only a handful of companies are worth more than $1 trillion, including Tesla and Amazon. Google parent Alphabet and oil group Saudi Aramco are valued at about $2 trillion, while Microsoft’s market value is roughly $2.5 trillion.

Apple plans to expand into categories such as self-driving cars and augmented reality as it looks to reduce its reliance on its top-selling iPhones that make up for more than half of its revenue.

Notably, Apple is worth more than any of Europe’s main regional indices including Britain’s FTSE 100, France’s CAC 40, Germany’s DAX, Spain’s IBEX 35 and Italy’s FTSE MIB. - Reuters/The Financial Times Limited 2022

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