Reports from the Heart of the Machine
Edit: Zenan
For investors, Apple, which has a stable performance, is a "safe-haven asset" .
At the beginning of 2022, a new record was born in the capital markets.
On January 3, the first trading day of the year, Apple became the first company in the world to reach a market capitalization of $3 trillion. Although the stock price was slightly below this milestone at the close of the day, it still rose 2.5% to share price of $182.
In addition to external factors such as the US dollar, investors have shown great confidence in the company that launched the iPhone, and people expect Apple to continue to launch best-selling products in the future and extend its tentacles to new markets such as self-driving cars and meta-universes.
In terms of revenue, Apple has also been showing its strength to investors. Apple's existing product lines, including services such as the iPhone, MacBook, Apple TV and Apple Music, have been attracting consumers in recent years.
According to Apple's fourth-quarter earnings report last year, all of its product lines grew, and although the performance was lower than expected, it still recorded revenue of $83.36 billion, an increase of 29% year-on-year. At the same time, after Apple used its self-developed M1 chip in personal computers, the performance of Mac performance also continued to attract attention, and its Mac revenue in the fourth quarter was $8.24 billion, an increase of 16% year-on-year, higher than the market expectation of $8 billion.
Apple's free cash flow of more than $90 billion in 2021 means the company has almost unlimited resources to allocate to new technology research and development.
$3 trillion, equivalent to 19.1 trillion yuan, roughly equivalent to the market capitalization of five and a half Tencent, or seven and a half Moutai. "This is an amazing achievement that is clearly worth celebrating," said Jake Dollarhide, CEO of longbow Asset Management, an investment firm. "It shows the world how far Apple has come and how dominant it is seen by most investors."
Apple's rapidly rising market capitalization.
If the horizontal comparison continues, Apple and Microsoft are both above the $2 trillion threshold, and the latter has a market capitalization of $2.51 trillion. Google, Amazon and Tesla are all worth more than $1 trillion, while Saudi national oil company Aramco is worth about $1.9 trillion.
"This market performance is a return on companies with strong fundamentals and balance sheets. Reaching such a huge market capitalization has proven that they are powerful businesses, not speculative activities." Scott Wren, senior global market strategist at Wells Fargo's Investment Institute, said.
Apple's stock has skyrocketed for more than a decade, since January 2007, when co-founder and former CEO Steve Lee said that apples have been on the rise. Since Jobs launched the first iPhone, Apple's stock price has risen by more than 6330%, far exceeding the S&P 500 index's increase of about 240% in the same period.
After Jobs's death, Apple found more directions for development. Tim, who became CEO in 2011, Under Cook's leadership, Apple has dramatically increased revenue from services like video streaming and music. That helped Apple reduce its reliance on the iPhone from more than 60 percent in 2018 to around 52 percent of its total revenue in fiscal 2021, much to the satisfaction of investors who have been concerned that the company is too dependent on its best-selling products.
Still, more than 50 percent still doesn't seem to be a steady percentage, and some investors are still worried that Apple is reaching the limits of its user size and the revenue it can squeeze out of each user, and there is no guarantee that future product categories will be as profitable as the iPhone.
The recent popularity of the tech landscape, such as 5G, virtual reality and artificial intelligence, has also increased the appeal of Apple and other big tech companies.
According to market research firm CounterPoint Research, Apple led for the second consecutive month in China, the world's largest market for smartphones, accounting for 23,.6%, beating competitors such as Vivo and Xiaomi, and surpassing all other mobile phone brands in October's market share for the first time since 2015. This is mainly due to the newly launched iPhone 13 series, and if you look at the data of the same period last year, Apple's overall position has declined slightly.
According to earlier data, about one-fifth of total iPhone sales came from Chinese consumers. Counterpoint's data also shows that Apple's sales in November increased by 15.5% compared with the previous month.
Another important event in the market yesterday was the sharp rise in Tesla's stock price by 13.53% and a sharp increase in market value of $145 billion. With Wall Street betting on electric cars, Tesla is now the world's most valuable automaker, and many investors expect Apple to launch its own cars in the coming years as well.
Rhys Williams, chief strategist at Spouting Rock Asset Management, said: "The icing on the cake may also end up being a big cake, and that's the potential of electric vehicles."
Given that global supply chain issues caused by the pandemic are also affecting Apple, the company's recent excellent performance has been surprising. To be sure, this round of growth is not over. Morgan Stanley analyst Katy Huberty raised Apple's price target from $164 to $200 in a note last month.
For reference:
https://www.reuters.com/markets/europe/apple-gets-closer-3-trillion-market-value-2022-01-03/