Apple Inc’s stock market value has exceeded USD 3 trillion for the first time, buoyed by signs of improving inflation and optimistic projections of the company’s expansion into new markets.
On Friday, Apple’s shares climbed 2.3 per cent to reach USD 193.97, resulting in a market capitalisation of USD 3.05 trillion, as reported by Refinitiv data.
This achievement marks Apple’s fourth consecutive record high close, with the company having briefly surpassed the USD 3 trillion mark in intraday trading on 3 January 2022. The Cupertino-based company’s consistent upward trajectory demonstrates its growing dominance in the global market.
Apple’s stock rally was fueled by positive developments in the fight against inflation, as indicated by the latest Commerce Department report. The data showed that the Personal Consumption Expenditure price index advanced at a slower pace in May compared to April, reflecting progress in the Federal Reserve’s ongoing efforts to curb inflation.
Investors have also shown confidence in Apple’s potential to explore new markets and capitalise on emerging technologies like artificial intelligence. The company’s stock has surged by an impressive 49 per cent so far in 2023, outperforming analysts’ expectations. This rally has been driven by the belief that the Federal Reserve’s interest rate hikes are nearing their end and by Apple’s strong reputation as a safe investment during times of economic uncertainty.
Despite a recent quarterly report revealing a decline in revenue and profits, Apple still managed to surpass analysts’ expectations. The company’s consistent track record of stock buybacks further reinforced its position as a reliable investment option.
Apple’s milestone of surpassing USD 3 trillion in market value comes shortly after the launch of its highly anticipated augmented-reality headset on 5 June. This venture, regarded as the riskiest since the introduction of the iPhone over a decade ago, has generated positive sentiment among investors. Since its release, Apple’s stock has risen by approximately 7 per cent, outpacing the broader S&P 500 index, which has grown by 4 per cent.
The recent gains in Apple’s shares have exceeded analysts’ projections, with the stock now trading at over 29 times expected earnings. This represents the highest level since January 2022, according to Refinitiv data. In comparison, the median price-to-earnings ratio for the S&P 500 technology index stands at around 13.
Apple’s achievement of a USD 3 trillion market value places it in an elite group of US companies, including Alphabet Inc, Amazon.com Inc, Nvidia, and Microsoft Corp, which have valuations exceeding USD 1 trillion. Microsoft follows Apple closely with a market value of USD 2.5 trillion.
(Inputs from Reuters)