Forget $3 trillion—Apple could be worth $4 trillion by 2025, bullish Wedbush analyst Dan Ives wrote in a Wednesday note to clients. The company’s $3,499 headset set to release next year “is the first step in a broader strategy for Apple to build out a generative AI driven app ecosystem for its golden customer base,” Ives gushed. Wedbush has a $220 price target for Apple stock, above consensus but below Citi’s $240 target, which is the highest of any Wall Street firm, according to Bloomberg. Apple’s market capitalization soared past $3 trillion Friday, a historic milestone as the world’s largest company continues to grow larger thanks to resilient profits and product sales. CFO Luca Maestri pointed to the growing installed base of devices and the double-digit growth in customers paying on the platform as indicators of the sustainability of services revenue.
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In a sign of Wall Street’s ongoing optimism about the stock, Citi on Thursday began coverage of Apple with a buy rating, writing that its ability to continue expanding margins was underappreciated. It sees additional upside of about 30% for the stock, a target that would take Apple close to a $4 trillion valuation. That’s Apple’s weight on the S&P 500, making it by far the most influential component of the widely-tracked index. Apple’s nearly $940 trillion in added valuation this year accounts for roughly a fifth of the S&P’s $4.4 trillion in total added market cap. Apple’s dramatic growth was reinforced by rising iPhone sales, which increased almost 40% over the 12-month period ending September 2021, the New York Times reported.
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“The balance sheet is phenomenal, it pays a dividend it can continue to grow, it has an active repurchasing program, and a consumer staples-esque platform business, all powered by a device people look at four hours a day,” Curtis said. Apple is worth nearly as much as Tesla, Meta, Berkshire Hathaway, UnitedHealth and Visa—the sixth through tenth most valuable American companies—combined. Wedbush also predicted the release of an Apple Car by 2025, prompting further growth for the company.
Market capitalization of Apple (AAPL)
In 1995, Ford became the first U.S. company to reach $100 billion in value. Two years later, as Apple was flirting with bankruptcy, Microsoft became the first U.S. company to hit $500 billion. Buoyed by the rising popularity of the iPhone, Apple outstripped its competitors and, in 2018, became the first U.S. company to reach $1 trillion. In 2020, even as the global economy shrank due to the coronavirus pandemic, tech companies benefited from an increase in remote work and online shopping, and Apple became the first U.S. company to hit $2 trillion. Microsoft reached the $2 trillion milestone in June 2021 and Alphabet in November. Apple became the first company to reach $3 trillion market value Monday, a leap of $1 trillion in just 16 months, despite sometimes unsteady iPhone sales and supply chain issues.
Market Cap History
Demand for Apple products exceeds supply by about 12 million units, with supply chain issues expected to ease during the first half of 2022, according to a report by investment firm Wedbush Securities. Apple’s shares, which have jumped nearly 20% this year, rose to $236.30, giving the company a market value of $3.62 trillion, the highest in the world. Apple yesterday returned to being the most valuable company in the world, after a new record high saw the company valued at $3.62T.
- In 1995, Ford became the first U.S. company to reach $100 billion in value.
- Apple just crossed the $2 trillion market capitalization mark, becoming only the second company ever to do so.
- Saudi Arabia’s state-owned Saudi Aramco, the world’s largest producer of oil, did so during its December 2019 stock debut.
- Most of the gain is a result of an expansion in the multiple investors are willing to pay for Apple’s earnings per share (EPS), or the price-to-earnings ratio, rather than growth in the business itself.
- Apple’s shares, which have jumped nearly 20% this year, rose to $236.30, giving the company a market value of $3.62 trillion, the highest in the world.
Apple again the most valuable company in the world, worth $3.62T
It is calculated by multiplying the stock price by the number of shares outstanding. Even after the meteoric rise, Apple can gain another 25% over the next 12 months, Citi analyst Atif Malik wrote in a Friday note, setting a $240 price target for the stock thanks to underappreciated room for growth in profit margins. Saudi Arabia’s state-owned Saudi Aramco, the world’s largest producer of oil, did so during its December 2019 stock debut. But the company was hammered during this year’s global economic slowdown and a plunge in oil prices, and its valuation has since tumbled to $121 billion.
It first reached $1 trillion in value in mid-2018, and it achieved a $2 trillion valuation in August 2020, making it the first US company to surpass that level, though Saudi Aramco was the first $2 trillion company overall. Historically, stock splits tend to increase demand, increasing value for existing shareholders, which include company employees. Apple wants “to make our stock more accessible to a broader base of investors,” said Luca Maestri, the company’s chief financial officer, during a recent earnings call. When you cross the milestone first, it’s a signal of leadership,” said Gene Munster, Loup Ventures founder and former top tech stock analyst.
In December, Apple issued $180,000 stock bonuses to some of its top engineers to prevent defections to companies like Facebook owner Meta, Bloomberg reported. “The idea is to buy low and sell high, and the price was low as recently as March,” he said. On the horizon, the company has growth opportunities around 5G, health and wellness, and augmented reality. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Increasingly, customers are reliant on a blend of interconnected Apple services such as iCloud, Photos, Music, and the App Store, which has shifted focus from fixed prices for apps with in-app purchases to recurring subscription models. Since December 1, 1998, Apple’s market cap has increased from $4.60B to $3.36T, an increase of 73,029.81%. Apple has a market cap or net worth of $3.36 trillion as of August 13, 2024. The stock trades at about 30 times forward earnings, and while this is down from a 2020 peak above 35, it remains well above its 10-year average multiple of 17.9.
The market has been upbeat about demand for Apple’s (AAPL 1.62%) iPhone 13 and growing services business. The stock briefly hit $3 trillion in market value recently, which is more than 10% of the U.S. economy. Apple has soundly beaten the market averages, with the shares rising 360% over the last three years. Market capitalization, also called net worth, is the total value of all of a company’s outstanding shares.
While virtually everyone needs a phone or computer these days, not everyone chooses to pay a higher price to own an Apple device. Here’s how Apple’s performance compares to top software provider Adobe, which sells at a much higher P/E than Apple. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. Apple Inc. is an American hardware and software developer and technology company that develops and sells computers, smartphones and consumer electronics as well as operating systems and application software. Apple also operates internet sales portals for music, films and software.
Apple’s stock has been on a tear since 2019, more than tripling from its $150 price in January of that year, driven by anticipation for upgrades to 5G devices and strong demand for the iPhone 11. But a more significant moment may have been when the company topped $1 trillion for the first time, in August 2018. After breaking $1 trillion, it becomes easier for investors to imagine it might go to $2 trillion or $2.5 trillion, Munster said.
The tech and services company has positioned itself to take some advantage of its new stature. In early August, the company announced a four-for-one stock split, the company’s fifth stock split since going public in 1980. Individual shares are trading in the mid-$400’s, so for instance a unit worth $440 would be split into four shares of $110. The market capitalization sometimes referred as Marketcap, is the value of a publicly listed company.In most cases it can be easily calculated by multiplying the share price with the amount of outstanding shares. As of August 2024 Apple has a market cap of $3.361 Trillion.This makes Apple the world’s most valuable company by market cap according to our data. The market capitalization, commonly called market cap, is the total market value of a publicly traded company’s outstanding shares and is commonly used to measure how much a company is worth.
But financial experts say that individual investors should beware of getting burned on the Apple hype. Some of the expected uptick in stock interest around the valuation and stock split are already built into the stock price. But it’s not just the growth of high-margin services that deserves attention. Specifically, investors should pay attention to the explosion in subscriptions across Apple Music, Fitness+, and Apple TV+, which should justify a higher valuation for the stock. The market has a history of placing a high value on consistent growth.