It was only a matter of time. It’s never before been done by an American company. $1,000,000,000,000. It’s a really big number. That’s 12 zeroes. Apple’s the one. Born in America. Thriving around the globe.
Exactly how big of a company is Apple now? How about this for perspective; With the $1 Trillion market capitalization, Apple is now larger than Disney, Starbucks, Target, Costco, Salesforce, Macy’s, Ralph Lauren, Ford, Kellogg, General Mills, Carnival Cruise, GE, Hyatt Hotels, PG&E, Twitter, Best Buy, CBS, Clorox, Tiffany, Molson Coors, Harley Davidson, GAP Stores, News Corp, Nordstrom, Alcoa, Marriott and US Steel…. combined. That is a list of 27 universally recognized, household names. Apple is that big.
The Chinese Energy company PetroChina cleared the $1 Trillion level in 2007, but the government owned most of it, raising questions of the legitimacy of its value. It didn’t hold it very long either. PetroChina lost a whopping 70% of its value since then. Amazon, Google and Microsoft are up next, currently worth $891 Billion, $856 Billion and $824 Billion, in that order. The 5 most valuable companies in America (Apple, Amazon, Google, Microsoft, and Facebook) have emerged as the Titans of Tech. They account for over 15% of the total value of the S&P 500. And there’s this: these 5 stocks combined are more valuable than the bottom half of the 500 S&P companies. They’re really big.
The evolution of Apple is an American success story with few rivals. It has been both eventful and bumpy. There have been multiple leaders but one constant: delivering sleek and powerful devices that its loyal customers crave. An important segment today is its Services biz, which started from scratch a few years ago but is now 20% of revenues and growing fast. The company’s roots began in Steve Jobs’ parents garage in Los Altos in 1976. Apple had its IPO in 1980. The Macintosh was launched in 1984. 2001 brought the iPod. But it was the iPhone that changed everything in 2007, which launched the app store and so many new business lines contributing to the “internet of things.” Apple was worth $105 Billion at the birth of the iPhone, roughly 1/10 the value today. Its Services business has become the fastest growing segment, which consists of iTunes and Apple Music, the App Store, AppleCare, iCloud, Apple Pay and more. It’s also believed to be the most profitable, and in many ways its Services business is the glue that binds everything together in the Apple ecosystem.
In case you were wondering, Apple was worth $1.7 Billion overnight at its IPO in 1980. The company fell to a mere $558 Million valuation when Steve Jobs left the company in 1985. Apple was worth $2.7 Billion when Jobs returned in 1997. And Apple was worth $350 Billion when Steve Jobs died in 2011. It wasn’t the largest company in America then. That honor went to Exxon. But Apple quickly leap frogged the Oil giant, and never really looked back. Now it’s worth a Trillion.
Apple’s record run stoked another rally on Wall Street this week. When you focus on politics, geopolitics and trade tariffs, you might have trouble understanding how the Stock Market can be so strong and so close to all-time highs. But when you focus on how companies like Apple, Google and Amazon continue to deliver record revenues and profits, it makes more sense. These are the engines of the S&P and the momentum has been building. August and September are seasonally challenging Market months. But the underlying health remains quite strong. We’re ready for whatever comes our way.
Have a nice weekend. We’ll be back, dark and early on Monday.
Mike
