Introduction: Apple’s market value broke through the $2 trillion mark in trading on Wednesday, only two years after hitting $1 trillion. Novel coronavirus pneumonia is a new market for growth. The market value of apple is growing at an alarming rate. The new 1 trillion dollar market value starts with the new crown pneumonia pandemic. Investors regard technology giants as shelters, hoping to avoid the epidemic caused by the epidemic by using their bulk and market power. At the same time, Apple’s milestone also proves that Apple CEO cook’s efforts to bet on the service business have achieved results.
since Apple was founded, it took the company 42 years to raise its value to $1 trillion. Now, it only takes two years to reach $2 trillion, and its market value has increased by $500 billion in two months. Novel coronavirus pneumonia is a shocking
. Apple’s new $1 trillion market value is all from the past 21 weeks, which is the 4 month of the new crown pneumonia epidemic. Under the influence of the epidemic, the global economy is declining faster than ever.
Apple shares rose 1.4% to $468.65 in midday trading on Wednesday, becoming the first U.S. company with a market capitalization of $2 trillion. By the end of Wednesday, Apple’s share price had shrunk to 0.13%, with a market value of $1.979 trillion. This is another milestone for apple, consolidating its position as the world’s most valuable listed company, and highlighting how the epidemic has become an unexpected source of revenue for technology giants.
just in the middle of March this year, Apple’s market value was still under $1 trillion. At that time, the stock market plummeted because of concerns about the epidemic. On March 23, the stock market hit its nadir. On the same day, the Federal Reserve announced a radical unlimited bond purchase program to placate investors. Since then, the stock market has soared in general, especially technology giants apple, Microsoft, Amazon, Google’s parent company alphabet and Facebook. On Tuesday, the S & P 500 hit a new high.
investors have invested billions of dollars in buying shares of technology giants, betting that their size and market power can serve as a refuge from the economic downturn triggered by the epidemic. The combined market capitalization of the five technology giants has risen nearly $3 trillion since March 23, almost equal to the combined market value growth of the next 50 companies in the S & P 500 index, including Berkshire Hathaway, Wal Mart and Disney, according to market analyst S & P global. Apple’s market value alone has grown by about $6.8 billion a day, more than the market value of American Airlines.
“it’s a new flight to safety.” ASWAT Damodaran, a finance professor at New York University who studies the stock market, refers to investors flocking to technology giants. He pointed out that companies with strong financial resources, flexibility and digitalization will benefit from the epidemic, which is the characteristic of technology giants. “This crisis makes the strong stronger.” He said.
it’s particularly surprising why Apple’s market value has reached $2 trillion so quickly, because there have been few new moves by the company in the past two years. Apple has just built itself into one of the most efficient money making companies in the technology industry, firmly grasping the essence of how people connect, entertain and shop, and no longer need groundbreaking inventions to maintain business prosperity.
in August 2018, after decades of innovation, Apple’s market value hit $1 trillion for the first time. The company, founded in 1976 by Steve Jobs and Steve Wozniak, launched world changing products such as the Mac, iPod, app store and iPhone.
since then, Apple has largely been improving its past innovations, releasing the apple watch series 5, airpods pro and iPhone 11 Pro max. Apple has also continued to push the service sector, launching streaming music, TV and movie services, providing news applications, and selling subscription services to them.
under the leadership of CEO Tim Cook, Apple’s most important innovation in recent years can be said to be unrivalled earning power. Cook has built an advanced global supply chain to produce billions of devices for apple, most of which are assembled in China, and lean toward a product line (iPhone), so as to lock customers into the company’s ecosystem, buy new devices launched by apple every few years, and use Apple’s digital service packages on a monthly basis. The
novel coronavirus pneumonia will only further consolidate Apple’s business, forcing people to work, study and socialize online. From April to June this year, although Apple closed many retail stores due to the epidemic, its net profit still reached 11.25 billion US dollars, an increase of 12% year on year. Apple’s sales of each product, in every region, have increased.
“our products and services are closely related to our customers’ lives. In a way, the link is closer than ever before. ” Apple CFO Luca Maestri said in an interview last month.
Cook said in a recent conference call: “we don’t use zero sum thinking for the success of our company. We’re focused on making the cake bigger and making sure that it’s not just our family that’s successful; every product we develop and produce is designed to create opportunities for others. ”
Apple’s fast-growing P / E ratio shows that investors are beginning to view Apple’s business more from the perspective of software companies than from other hardware manufacturers. Apple is now trading at more than 33 times earnings. “Over the past four months, the market has really valued apple as a software company,” said Logan purk, an analyst at investment bank Edward James, who gave apple a “hold” rating. “The service business has grown pleasantly, and it seems that it has given apple a price earnings ratio of more than 30 times, which has earned apple a global reputation for its subscription business.”
in 2015, when the iPhone business growth slowed for the first time, apple began to refocus investors’ attention on the service business. In 2016, Apple released new financial data related to its services business. “I really think that the assets we have in the services sector are huge, which may be something the investment community wants and should be more focused on,” Cook said at the time
in 2017, cook set an ambitious growth target for the service business: by the year 2020, the service business revenue will double from the 2016 fiscal year, that is to say, it will reach about 46 billion US dollars this year. In the first three quarters of fiscal year 2020, Apple’s service business revenue was US $12.715 billion, US $13.348 billion and US $13.156 billion (22% of total revenue), totaling US $39.219 billion, which is expected to achieve this goal.
Apple has also used another powerful tool to boost market value and make investors and executives richer: buy back shares. Since Apple’s market capitalization reached $1 trillion, Apple has returned $175.6 billion to shareholders, including $141 billion in share buybacks. Since 2012, Apple has bought back more than $360 billion of its shares. Apple also announced plans to invest at least tens of billions of dollars in its shares.
since apple used the tax law enacted by the trump government in 2017 to remit most of the US $252 billion overseas cash reserve back to the United States, Apple has increased the scale of buyback. According to the Washington Institute of Taxation and economic policy, the new tax law has saved Apple $43 billion in taxes when it repatriates cash overseas. Apple currently has $1940 billion in cash and bonds.
share repurchase generally increases a company’s share price, in part because it reduces the number of shares available for sale. Critics argue that this increases inequality, because buybacks are primarily about enriching wealthy investors and executives, who are usually large shareholders. Apple is no exception. Technology executives and some economists believe that it is better for companies to return too much cash to shareholders than to keep it in their hands.
apple is the second listed company with a market value of $2 trillion. Saudi Aramco, listed in December last year, had a market capitalization of more than $2 trillion. Saudi Aramco was the world’s most valuable company until it was overtaken by Apple last month.
other companies are also striving to enter the $2 trillion club as soon as possible. Who will be next? Microsoft, Amazon or alphabet. (author / Xiao Yu) < A=“ https://ibmwl.com/after-12-years-world-class-super-project-shantou-bay-tunnel-ushers-in-a-historic-breakthrough-today/ " target="_ blank" rel="noopener">After 12 years, “world class Super project” Shantou Bay Tunnel ushers in a historic breakthrough today