The race to $1 trillion
Depending who you talk to — and by most accounts — 2018 will be the year of the world’s first US$1 trillion market capitalisation company. It is a mythic milestone, no more. With a valuation teetering just above $920bn, iphone maker Apple is inching towards the $1 trillion mark.
Its continued upward trajectory has made it the world’s most valuable publicly listed company. As it stands — and I know this is not the most elegant comparison — Apple is worth more than the GDP of countries such as Turkey, Switzerland and Saudi Arabia.
At the time of writing, the company was trading at a lofty $182/share, despite concerns over weak demand for the iphone X and a somewhat middling earnings report last month. In fact, the share is up almost 40% since then.
To reach the 13-digit (gulp) milestone, Apple will have to continue rising at a similar clip. That’s pretty doable if there is a pipeline of successful-ish new products, share buybacks and further bump-ups from Warren Buffett.
Buffett’s Berkshire Hathaway purchased more shares of Apple than any other stock in the past year. According to securities & exchange commission filings, it increased its Apple holdings by 23.3%, to 165.3m shares.
But I’m just putting it out there that someone else might get to $1 trillion first: Amazon.
The online retail giant’s market cap is about $732bn, and GBH Insights says the group could hit $1 trillion in 12 to 18 months if it keeps rising at its current pace.
Daniel Ives, head of technology research at GBH, says Amazon’s “onetwo punch” of consumer retail growth and Amazon Web Services, aided by its $13bn buyout of Whole Foods and its entry into health care, could push it past the milestone.
He has raised Amazon’s price target to $1,850 from $1,500, saying that Jeff Bezos’s strategic path — on both the consumer and enterprise fronts — is still in the “middle innings of playing out” and Amazon remains a “green light” name to own at these levels.
There are those who aren’t that optimistic though. According to Thomson Reuters data, analysts on average expect Apple’s stock price to rise 11% to $195 in the next 12 months, which would put its market capitalisation at $989bn. Meanwhile analysts covering Amazon on average expect the counter to rise 10% in the next year to $1,700, which would give it a market value of $823bn.
Still, now that the world’s biggest flotation is unlikely to go ahead this year, odds are that a tech titan will claim the $1 trillion spot.
Oil giant Saudi Aramco’s initial public offering will only happen in 2019, at the earliest. It is expected to be valued from $1.5 trillion-$2 trillion.
e:
Dead-tree media, no more
In other Apple news, the company has bought the “Netflix” for magazines. Called Texture, it is a digital magazine app (for Apple and Android) that allows users to subscribe to more than 200 magazines (current and back issues) for $9.99/month. If you’re a magazine person, and don’t fancy coughing up hundreds of rond in Exclusives or CNA for your international titles (think Vanity Fair, Bloomberg Businessweek, Time), do yourself a favour and download it. Now.
The deal, I guess, signals a bigger push into content-related services and comes at a time when Facebook has pulled away from newsy and brandtype content distribution towards posts from friends and family.