Apple Inc. becomes the world’s ‘only’ company with a market value of $2 trillion

August 19, 2020 August 20, 2020
  • Apple Inc. becomes the world’s ‘only’ company with a market value of $2 trillion.
  • Refinitiv says the recent price action moved Apple further into the ‘overvalued’ territory.
  • Analyst Logan Purk attributes Apple’s success to CEO Cook’s increased focus on services.

Apple Inc. (NASDAQ: AAPL) was the first United States-based publicly listed company that boasted a market capitalisation of $1 trillion; a milestone that it had achieved back in 2018.

The American tech giant took only two more years to double its market value. As of Wednesday, Apple has become the world’s only company with a market cap of $2 trillion.

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Shares of the company opened at $463.96 per share on Wednesday. Apple’s stock touched an intraday high of $468.65 per share in the afternoon session that translated to a market value of $2.004 trillion. It closed the regular session at $463 per share that boasts a market cap of $1.98 trillion.

On a year to date basis, the Cupertino-based firm is about 57% up. At the time of writing, it has a price to earnings ratio of 35.18.

Apple moves further into the overvalued territory

In comparison, Apple had sunk to $225 per share in March when the Coronavirus pandemic pushed it into temporarily closing its retail stores. In the past five months, the U.S. multinational has climbed by over 100% in the stock market.

Apple’s rally received a massive boost from its third-quarter financial results that it reported on July 31st. The iPhone maker’s revenue jumped to a record high in Q3 as it blew past what the analysts had anticipated for quarterly earnings and revenue. Consequently, its market value topped that of Saudi Aramco to win it the title of the world’s most valuable company in the first week of August.

According to Refinitiv, the recent price action moved Apple further into the ‘overvalued’ territory. Its per-share price is now more than 30 times experts’ forecast earnings that translates to its highest level in over ten years. Apple expanded its independent repair shop programme to Mac computers on Tuesday.

Analyst Logan Purk’s comments on Wednesday  

The next in line in the race to $2 trillion valuation is Microsoft and Amazon, each of which currently has a market cap of $1.6 trillion. Analyst Logan Purk of Edward Jones attributed Apple’s success to CEO Tim Cook’s increased focus on services. According to Purk:

“Over the past four months, the market has really been valuing Apple as a software company. The services business is growing nicely – it seems to give them a multiple over 30, an gives them all the credit in the world for this subscription business. They’re starting to get compared to some really big software heavyweights.”

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