Apple is First Company to Hit $3 Trillion Valuation

Posted on January 3, 2022 by Paul Thurrott in Apple with 32 Comments

Today, Apple became the first publicly-traded company to reach a $3 trillion valuation by market capitalization. Not bad for a firm that was headed for insolvency in the late 1990s.

What’s most impressive about this milestone, perhaps, is how Apple’s value has soared in recent years. It took the firm 42 years to reach the $1 trillion market cap milestone, a feat it first accomplished in 2018. It then took Apple only two years to double that valuation to $2 trillion, in 2020. And now it has reached $3 trillion in just 18 months.

The New York Times has some nice comparisons to put that number in perspective. $3 trillion is worth more than Walmart, Disney, Netflix, Nike, Exxon Mobil, Coca-Cola, Comcast, Morgan Stanley, McDonald’s, AT&T, Goldman Sachs, Boeing, IBM, and Ford … combined. It’s worth more than the value of all of the world’s cryptocurrencies. It is about the same as the gross domestic product of Britain or India. Or the same as about six JPMorgan Chases or 30 General Electrics.

Put another way, Apple is now worth nearly 7 percent of the total value of the S&P 500, a record. The previous record-holder was IBM, which was worth 6 percent of the S&P 500 in 1984.

But here’s some good news for Microsoft fans: the software giant is currently worth over $2.5 trillion and it is expected to follow Apple north of the $3 trillion line later this year.

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Comments (32)

32 responses to “Apple is First Company to Hit $3 Trillion Valuation”

  1. lvthunder

    That is crazy. The question is though is it real or just a bubble.

    • Stabitha.Christie

      P/E isn't particularly high. It's a little lower than Microsoft and a bit above Meta and Google. So if their revenue continues to grow as it has then it's likely not a bubble. Amazon and Tesla on the other hand seem way more bubble like.

    • mattbg

      To me, it seems like they have a decent lock on a big chunk of the market for as long as peoples' lives revolve around mobile phones. They've figured out how to sell things that people like at a high price that people are OK with and they've created a high barrier to entry with the ecosystem. It's hard to beat that for the time being.


      I have a feeling that increasing interest rates might be something that trips up their growth trajectory, should those ever happen. Their phones are only affordable because they can be amortized over 24 months, which is easy to do when financing is at near-zero rates.


      On the stock price specifically, I can never explain the schizophrenia of marketeers who say that the price is high because "investors are pricing in growth" while simultaneously saying "the stock price will continue to grow because of increasing revenues" but that's just the way it works for the time being. It will stay highly-valued until it doesn't :)


      For both MSFT and AAPL, the dividends are now rather ridiculous - especially with inflation so high - so it doesn't make much sense to invest in either one purely for their profit-generating benefits of their business.

    • bluvg

      Well, when you can essentially print money like they do.... :)

  2. Saarek

    Well I guess that's what happens when you can charge £699 for four small wheels for a Mac Pro Tower.

  3. locust_infested_orchard_inc.

    I wonder why the authors of the above chart (FactSet: Ella and Jason) depicting Apple's key market capitalisation milestones, didn't include Tesla ($1.2 trillion market cap) and Nvidia ($0.75 trillion market cap) on the right-hand side, rather choosing to include JP Morgan and Disney ?

    • wright_is

      Because they are both companies of long standing and stalwarts on the financial market.


      nVidia is little known, outside of enthusiast circles and Tesla doesn't have a good reputation and is still a new company, in stock market terms.

  4. locust_infested_orchard_inc.

    It should be noted that Apple only briefly became a $3 trillion company before $AAPL fell below the all-important $182.86 per share, which demarcates its $3 trillion worth by market capitalisation.


    So Apple became a $3 trillion worth company during the intra-day trading session, which to put into perspective, is about the size of the 5th largest economy in the World – the UK.


    It's an ultra-impressive feat considering Apple was on the brink of bankruptcy, as noted by Paul in the article, when Apple had only 90 days of cash left in the bank. With its future extremely bleak as almost no one and the banks gave Apple a chance to survive.  


    The friendship Steve Jobs enjoyed with his now main competitor came to the rescue of Apple from oblivion – of course it was none other than Bill Gates, who agreed to invest $150 million in Apple in August 1997.

    • pecosbob04

      My favorite (not quite the whole) story! Gates saved Apple by investing $150,000,000 except that aint how it went down. $150M wasn't enough cash to make a difference for more than a month or so at the existing run rate. And that $150M was a special stock purchase which settled some patent disputes between Apple and Microsoft. As part of that settlement some cross licensing agreements were negotiated which proved quite advantageous to both companies. Also the stock given to Microsoft had to be held for a set period of time and immediately at the end of that time they sold it for a handsome profit (they should have held it). So what did save Apple? As part of the agreement MS declared that it would continue to support Office on the Mac for a guaranteed period of time (5 years iirc). At the time Office was the most important software on the planet and there had been talk of dropping support on the Mac. Gates declaration gave Apple breathing room and increased confidence that Apple was still viable. So why did Gates / MS do it? Bill's just a great guy helping out a frenemy for old time sake is one possible answer. I think this explains it better; There were lawsuits over patent issues that if MS lost would be very costly, but the crux of the issue is MS needed a competitor in Operating Systems without Apple they were a naked monopoly, hell with Apple they were still pretty much a monopoly. Anti-trust litigation is a bitch an expensive one at that as MS found out in later years.

      • Stabitha.Christie

        Yeah that urban myth seems to make its way back every so often. People tend to forget that Apple had 1.2 billion in cash at the time of the 150 million dollar investment or that Apple had returned to profitability by the time the investment happened.


        That said, Microsoft did do two two things that really helped Apple as part of that deal which were commit to making Office and IE for the make over the next seven years. Without Office and IE it's hard to see how Mac OS X would have been as successful as it was.

        • locust_infested_orchard_inc.

          You stated that pecosbob04's comment was "urban myth". Incorrect. pecosbob04's comment is factually accurate, with perhaps a few omissions.


          Another thing, you stated that "Apple had 1.2 billion in cash at the time [mid-1997])". I've never come across that figure in all readings of various articles over the years, so can you point me to the source of this alleged fact please ?

  5. corbey

    Yeah, I guess the market heard that Paul switched to an iPhone! 

  6. winner

    The bad news is that I bought a bunch of Apple stock in the early 2000s, and sold it when it reached $205/share maybe ten years ago, selling it for about 7x what I paid.


    The good news is that I kept about 10% of the total, which is now at nearly 100x what I paid!

    I wish I had kept it all...

  7. bluvg

    "It's a good business, if you can make it." -Steve Ballmer (about the 30% App Store cut)

    • johnnych

      😂

      Careful now, Paul has a soft spot for the Ballmer name! :)

      macrumors 2016 - "Former Microsoft CEO Steve Ballmer Admits He Was Wrong About the iPhone"

  8. bschnatt

    "$3 trillion is worth more than Walmart, Disney, Netflix, Nike, Exxon Mobil, Coca-Cola, Comcast, Morgan Stanley, McDonald’s, AT&T, Goldman Sachs, Boeing, IBM, and Ford … combined."


    But, hey, that's meaningless when you think about how much revenue Epic could have taken from Apple if they had been allowed to compete fairly!


    Yes, that was sarcasm. I have nothing against capitalism or shareholder value, yada, yada, but you have to weigh these against consumer needs and wants, and the general welfare of the developer ecosystem. Apple is apparently unwilling to consider that. It's KA-CHING all the way, baby!!

  9. lightbody

    Are they making any progress on moving some of the production back to the US? It looks like they have enough profit margin built in to cope with the increased production cost of doing this...


    As a premium brand of expensive phones, that "made in the USA" tag would give a differentiator against all the Chinese phones.

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