3 min read

Apple the first US$3 trillion company (again)

Trillion dollar tech companies don’t come bigger than Apple, which this June claimed the title of the World’s Biggest Company. Next in line is more Big Tech, but at half a trillion dollars behind, it’s not a close race. Do Wall Streeters think Apple’s fundamentals stack up over the long term?
Risk, returns & timeframes illustration
July 4, 2023
Belinda Nash

Last Friday marked an historic day for Big Tech. Apple hit a US$3 trillion mega market cap and stayed there - as opposed to this year’s temporary January jump - making it the world’s largest company. That marks year-to-date (YTD) growth of 54% and one year growth of 38.5%. Not too shabby for a tech company founded in 1976 by ‘college dropouts’ Steve Jobs and Steve Wozniak a year after Microsoft.

🎱 Better than winning a few lines in Lotto for some, too. If an investor bought just one US$22 Apple (AAPL) share when it listed on the US share markets in 1980, it’d be worth US$6,206.14 today - an increase of nearly 28,110% and 27% annual rate of return, nearly triple the average market return of 10%. 

Investors in the S&P 500 are now dancing in the green, with Apple comprising 7.7% of the index, which helped the stock to rally. It boosted the Nasdaq 100 too, helping the index to reach its ‘best-ever first half ever’ at nearly US$5 trillion.

The Trillion Dollar Tech Club 💰

  • Microsoft (MSFT) US$ 2.5 trillion market cap - founded in 1975, public in 1986
  • Alphabet (GOOGL) US$1.5 trillion - founded in 1998
  • Amazon (AMZN) US$1.3 trillion - founded in 1994
  • Nvidia (NVDA) US$1 trillion - founded in 1993

Analysts expectations are mixed:

Planned or fluke? We’ve come a long way since a turtle-necked Jobs announced the first iPhone in 2007, paving the way to watching awkward cute videos, from our wrists to our fingertips. Franklin Equity Group’s Jonathan Curtis said the US$3T market cap is down to Apple ‘executing on a business strategy that works’ and having a strong balance sheet. On the flipside, others view that Apple is short on fundamentals.

As Apple prepares for their September iPhone 15 launch, it’s the iPhone 14 and Apple’s abundance of services (Apple Music, TV+, Pay, Care, iCloud…) that helped the tech giant’s May earnings, which while beating expectations, still fell. But it was the popularity decline of Apple’s gadgets - from iPads, Macs, AirPods, Beats headphones to the Apple Watch - that hurt revenue the most. 

🚨 Apple warns they don’t expect to dodge economic challenges. The tech company couldn’t avoid pandemic production snags, and their finance chief Luca Maestri told analysts in May they expect next quarter revenue to decline 3%.

Vision Pro has a long way to go. While some analysts and tech heads applauded Apple’s bulky mixed reality headset Vision Pro, many couldn’t see consumers hurtling over the barrier-to-buy US$3,499 price tag - not even Apple boss Tim Cook - leaving the company paddling fast to deliver cheaper headsets

The role of AI in Apple’s future. While the world awaits ‘what’s next?’ in AI, CEO Cook skimmed over AI questions during the company’s May earnings announcements. And at their WWDC (Worldwide Developers Conference), AI wasn’t mentioned, not even once’, despite Apple being open about an AI future. Word on Wall Street from others, however, is that AI’s influence could ‘revolutionize’ the Apple ecosystem.

Weekly news from Wall St
Subscribe to The Fry Up - your weekly sizzle of headline-grabbing share market news. Read by 60,000 Kiwis to help them take charge of their investing journey.
Free Getting Started Course
Take your first, or next, step to becoming a confident investor with Hatch's free online course – just 10 minutes a day, for 10 days.

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

Belinda Nash
Finance writer

More recent news articles

More recent learn articles

5 min read
Sep 26, 2023

Are petrol prices and oil stocks on the rise?

Will Kiwis face queues at petrol stations as we seek out competitive petrol in the face of rising global oil barrels hitting a 10-month high? This June, Opec+ oil producing members agreed to lower oil supply and agreed again this September to continue. So what does that mean for Big Oil stocks?
Read more
5 min read
Sep 19, 2023

Cruise ship stocks climb in post-pandemic recovery

Summer’s set to sizzle in Aotearoa but not everyone’s happy that the cruise industry’s setting sail to our calm waters. Behemoth passenger ships are bringing record numbers of tourists to our shores as the global cruise industry recovers from their Covid woes. We zoom out five years to see what’s been going on.
Read more
5 min read
Sep 12, 2023

Airbnb stock jumped 11% this September... why?

From NYC to Paris and plenty of places in between, Airbnb’s been battling for their place in the short term rental market. But cities are saying otherwise. In a global cost of living crisis, residents are being squeezed out of rental properties and now the Big Apple’s regulators are coming in hard. So why's Airbnb's stock soaring?
Read more
// will cause all rich text links to open in a new tab