The tech giant Apple has become the first US company to hit 3 trillion dollars in market value, briefly reaching the landmark in the latest demonstration of the tech industry’s pandemic surge.
On the first day of trading in 2022, the company’s shares hit an intraday record high of $182.88, putting Apple’s market value just above $3 trillion. The stock ended the session up 2.5% at $182.01, with Apple’s market capitalization at $2.99 trillion.
Apple also was the first US company to hit $2 trillion in August 2020, during the Covid-19 pandemic that stoked demand for personal electronics and digital services, such as Apple’s streaming and smartphone app store. And it likewise was the first American firm to overtake $1 trillion in August 2018.
While the top tier of US stock markets is dominated by Silicon Valley companies, Microsoft is the only other American company worth more than $2 trillion. In October, Apple reported a net income of $20.5 billion on revenue of $83.4 billion, a record high for the quarter ending in September.
Apple has seen pressures in recent months due to supply chain problems, including a global shortage of semiconductors and Covid-related manufacturing disruptions in Southeast Asia. Apple’s shares tumbled following that October earnings report, but rallied thereafter, winning nearly 20 per cent in the final two months of 2021.
The world’s most valuable company reached the milestone as investors bet that consumers will continue to shell out top dollar for iPhones, MacBooks and services such as Apple TV and Apple Music.
Apple shared the $2 trillion market value club with Microsoft which is now worth about $2.5 trillion. Alphabet, Amazon.com and Tesla have market values above $1 trillion. Saudi Arabian Oil is valued at about $1.9 trillion.
Apple’s shares have climbed around 5,800% since co-founder and former chief executive Steve Jobs unveiled the first iPhone in January 2007, far outpacing the S&P 500’s gain of about 230% during the same period.
Under Tim Cook, who in 2011 became chief executive following Jobs’ death, Apple has sharply increased its revenue from services like video streaming and music. This helped Apple reduce its reliance on the iPhone to about 52% of total revenue in fiscal 2021 from over 60% in 2018, pleasing investors worried the company relied too much on its top-selling product.
Still, some investors worry Apple is hitting the limits of how much it can expand its user base and how much cash it can squeeze from each user, with no guarantees that future product categories will prove as lucrative as the iPhone.
The rapid embrace of technologies such as 5G, virtual reality and artificial intelligence has also increased the allure of Apple and other Big Tech companies. In China, the world’s largest smartphone market, Apple continued to lead for the second straight month, beating rivals such as Vivo and Xiaomi.