Stock surge takes Apple to US valuation record
● Apple made Wall Street history this week when its 2020 stock surge pushed its market value over $2-trillion (about R34.5-trillion), the first time a US company has surpassed that level.
It took Apple 38 years to reach its first $1-trillion in value, but the next trillion took only two years after the company rapidly expanded its hardware ecosystem with more iPhones and new Apple Watches and AirPods, launched digital services and leveraged its base of 1.5-billion devices to generate more recurring revenue.
The California-based company, run by CEO Tim Cook, has also been buoyed by the broad adoption of mobile internet-connected devices, apps and other cloud services, especially during the Covid-19 lockdown.
Buybacks and dividends have lured new investors, such as Warren Buffett, and an imminent stock split should keep smaller investors interested, too.
The market milestone
“again demonstrates Cook’s amazing acumen as Apple’s CEO”, according to Michael Gartenberg, a former senior marketing executive at the iPhone maker.
“The key to Apple’s success has been an unwavering commitment to its attention to the details of things that other companies might find mundane.”
The gains have solidified Apple’s position as the most valuable company in the world.
While Saudi Aramco briefly boasted a $2-trillion valuation in December, shares of Saudi Arabia’s national oil company subsequently dropped, and it now trades with a market cap of about $1.8-trillion.
Among US companies, Apple is trailed by Amazon and Microsoft, both of which have market caps of less than $1.7-trillion.
The past two years have not been easy for Apple, though.
Cook has had to manoeuvre through a trade war between the US and China, where most Apple devices are assembled.
The company missed its holiday sales forecast in 2019 for the first time in nearly two decades, triggering a plunge in the shares. Now Apple’s App Store is under fire from regulators and some developers who complain that the company charges high fees and limits third-party applications in favour of its own offerings.
Cook, Apple’s top executive since 2011, has handled most of these challenges well so far. He talked US President Donald Trump out of imposing large tariffs on key products such as the iPhone and AirPods, and worked with the administration to keep production of the Mac Pro computer in Texas.
The CEO closed hundreds of Apple retail stores due to the pandemic, and many employees were told to work remotely. In the midst of these disruptions, Apple launched new iPad Pros and a lower-cost iPhone.
The company recently reported quarterly sales and profit that far exceeded Wall Street expectations.
“If we stay focused on doing what we do best, if we keep investing, if we manage the business wisely and make decisions collaboratively, if we take care of our teams, if our teams take care of their work, I don’t see any reason to be anything but optimistic,” Cook told staff in April.