Is Apple Really Worth $ 2 Trillion? Its stock tactfully approached this historic high last week, closing Friday at $ 444, just 5% off target. Apple still has a market capitalization of $ 1,9 trillion, roughly the size of Italy's gross domestic product. The stock (AAPL) has rallied by 55% year to date, following an 85% rise in 2019. Here's a look at what has been affecting the stock's performance in recent months:
IPhone: still the heart of the business. Apple posted smartphone sales of $ 26 billion in the June quarter alone, beating all estimates thanks to the iPhone SE. But the big wait is for the October launch of the 5G iPhones.
Mac and iPad: pandemic has increased Mac and iPad sales; the two segments together reported sales of $ 14 billion in the June quarter. While viewed by investors as a minor secondary business, together they can make sales of more than $ 50 billion annually.
Accessories: Apple Watch has become a major product among sports and wellness devices. The AirPods were an unexpected hit, accelerating the switch from wired earbuds. The next iPhone should ship without the earphones, both to reduce costs and to increase AirPod sales. The wearable accessories segment posted sales in the June quarter of $ 6,5 billion.
Services: The services sector had revenue for the June quarter of $ 13,2 billion. And this segment, which includes App Store, Apple Card, Apple Music. Apple Pay, Apple Care, Apple TV Plus, and other components tend to make Apple's hardware business more complicated.
Liquid assets: The company has $ 83 billion in net cash even as it boldly repurchases the stock quarter after quarter. But that $ 83 billion is only 4% of the expanded market capitalization. And the company's dividend yield is now well below 1%.
Homegrown: Facebook bought Instagram and WhatsApp. Alphabet bought YouTube and Android. Amazon.com bought Whole Foods Market, Zappos, and Diapers.com. Apple's biggest purchase ever was the $ 3 billion deal for headphone maker Beats. Apple doesn't buy growth, it builds it.
Limited antitrust risk: During the recent hearing in the House with CEOs of Apple, Facebook, Alphabet and Amazon, Tim Cook received the fewest questions, all limited to the company's business practices in the App Store. No one is attacking Apple for abusing consumer data or for acquiring competitors.
Tim Cook: Apple's CEO has built a cordial relationship with President Trump, despite a number of sensitive issues primarily involving Apple's presence in China. Since Cook succeeded Steve Jobs as CEO in August 2011, the Apple shares have increased by 750%. In other words, about 88% of Apple's rating was generated with Cook in charge.
