Apple Becomes Wall Street’s First Trillion-Dollar Company
Apple Inc. (AAPL), the world’s most valuable company, reached a major milestone Thursday after its market value crossed $1 trillion for the first time. The iPhone maker is the first publicly-traded U.S. company to reach that landmark, underscoring its explosive growth over the past two decades.
Shares of the Cupertino, California-based company reached a high of $207.05 on Thursday, enough to send its total market capitalization past $1 trillion. Share prices would later consolidate around $206.94 for a total value of $973.2 billion based on 4.92 billion shares outstanding.
The stock, which has returned 21% this year, was propelled higher by another solid earnings report showing above-trend profitability and revenue. On Tuesday, Apple reported an earnings per share of $2.34 for its fiscal third quarter on revenues of $53.3 billion. Analysts had forecast per-share earnings of $2.18 on $52.34 billion in sales.
The gains came even as iPhone sales basically flat-lined at 41.3 million.
Software and services revenue, which includes App Store, AppleCare, Apple Pay, iTunes and cloud computing services, posted quarterly revenue of $9.55 billion – the highest on record.
Although very few companies have rivaled Apple’s trajectory, the company is trying to fend off Amazon.com’s (AMZN) explosive growth. In 2011, the online marketplace was worth just a third of Apple’s value. On Thursday, it was worth roughly $875 billion, having surpassed $900 billion in July.
The technology-focused Nasdaq Composite Index traded sharply higher on Thursday, gaining 0.8%. The NYSE Fang+ Index, which includes Apple, Amazon and other high-growth stocks, was up 1.7%.
As Hacked reported Wednesday, 40% of technology stocks listed on the S&P 500 Index have entered into correction territory recently, raising the specter of a bigger market pullback in the near future. Tech giants Facebook Inc. (FB) and Netflix Inc. (NFLX) are down more than 20% from their recent peaks, which puts them in bear market territory.
Analysts at Morgan Stanley recently outlined the lending danger in a note to clients:
“With Amazon’s strong quarter out of the way, and a very strong 2Q GDP number on the tape, investors were finally faced with the proverbial question of ’what do I have to look forward to now?’ The selling started slowly, built steadily, and left the biggest winners of the year down the most. The bottom line for us is that we think the selling has just begun and this correction will be biggest since the one we experienced in February.”
Featured image courtesy of Shutterstock.