After reading the following article, I wonder if now is the time to sell the Apple stock I bought a few years ago. Or maybe I'll just buy another Mac.
Jim Hamm
Apple’s market cap surpassed $2 trillion for the first time yesterday, cementing its status as the biggest company in the world. Its stock, which will undergo a 4-1 split in the coming weeks, has increased over 50% in 2020.
Apple wasn’t the first to break the $2 trillion valuation mark—that honor goes to the oil conglomerate Saudi Aramco—and it (probably) won’t be the last. Big Tech buddies Amazon and Microsoft are both sitting at valuations around $1.6 trillion.
A crazy stat: it took Apple 42 years to reach a $1 trillion valuation, but only two years after that to break $2 trillion.
How’d Apple do it?
Pretty much by just being Apple. The iPhone maker hasn’t released an entirely new product since the HomePod in 2018, mostly focusing on tweaking or updating existing lines. But if there is one thing Apple does well, it’s make money: Despite the pandemic, Apple’s Q3 profits rose 12% while sales of every single product increased.
But it doesn’t just sell iPhones: Part of investors’ Apple fever has been fueled by CEO Tim Cook’s increased focus on its services business that includes Apple Music, Apple TV+, iCloud, and the App Store. In 2017, Cook outlined his goal to double 2016 services revenue by 2020, which he achieved six months ahead of schedule.
It was a prescient move. With iPhone sales plateauing worldwide, Cook’s pivot has investors valuing Apple less like a hardware company and more like a software one.
There will always be controversy
After Cook testified in the antitrust showdown with Congress last month, Fortnite creator Epic Games poked the bear by attempting to circumvent Apple’s 30% cut of in-app purchases. But even as other developers have joined in to criticize Apple’s alleged monopolistic control of the app marketplace, investors remain unfazed.
Looking ahead...Apple optimism continues to abound. The iPhone 12 coming this fall is widely expected to come equipped with 5G connectivity.