MAssume the stock market values of corporations like SAP, Disney, Boeing and Airbus, IBM, VW, Deutsche Telekom and Deutsche Bank, Goldman Sachs and JP Morgan, add them up and find out: Apple still weighs twice as much. With its share price rising to $ 182 recently, the company, which was founded in a garage in California in 1976, has just achieved a market value of $ 3 trillion – making Apple the first publicly traded company to ever jump that hurdle.
The record was preceded by a steep increase in share price: As recently as August 2018, Apple became the first American company to achieve a market value of more than $ 1,000 billion. Two years later, the company took the $ 2 billion mark. Another year and a half later, it has now reached a value roughly equivalent to the annual performance of the British economy or the value of all cryptocurrencies in the world. Does it go on and on?
The analysts, who regularly assess the opportunities and risks of Apple shares, are becoming more cautious. Most experts still recommend buying shares. On average, however, they trust the Cupertino company to only pay a rate of $ 175 within the next twelve months. So that would be a slight decrease from the current rate of $ 182.
“Facebook and Google are growing three times as fast”
Toni Sacconaghi from the American analyst firm Bernstein Research is one of the biggest pessimists about Apple shares. He confirmed his target price of 132 euros on Tuesday, which is well below the current rate. In his most recent study, Sacconaghi looked at the “Metaverse”, a new megatrend, which Facebook boss Mark Zuckerberg in particular was strongly promoting. Apple is also working on this topic, but from his point of view it is still unclear whether these virtual worlds are a threat or an opportunity for the iPhone company. In the longer term, the metaverse could quasi “cannibalize” Apple’s smartphones.
Martin Hermann, fund manager at Berenberg Bank, is also skeptical in an interview with the FAZ about the extent to which Apple will still be a leader in future trends. “At Apple, some possible products are already being priced in, although they have not yet been presented to the public or it is unclear whether they will come at all,” says Hermann. As examples, he also cites glasses for the Metaverse or the Apple Auto, which are repeatedly speculated about. Hermann now considers Apple to be relatively expensive. “Facebook and Google are valued cheaper, although this year they should grow more than three times as fast as Apple.”
“The market potential is infinite”
Christian Kahler, the chief investment strategist at DZ-Bank sounds more optimistic. “The big technology stocks will continue to do very well, if only because they can serve the whole world and thus have practically infinite market potential.” He finds it understandable that Apple is more cautious than Facebook when it comes to Metaversum: “Facebook is with its products always dependent on end products like the iPhone. It is therefore clear that Mark Zuckerberg is now fully relying on the Metaverse, where it would no longer be the case. ”The central institution of the Volks- und Raiffeisenbanken sets a target price of 205 dollars for Apple.
Some large investment banks have also recently raised their estimates for Apple, which should ultimately have spurred the latest price drive. The American investment bank Morgan Stanley increased its target price for Apple in December from 164 to 200 dollars and left the rating at “overweight”. The largest American bank JP Morgan even considers 210 dollars to be realistic and looks at the chances of a possible new 5G iPhone.
Is the $ 3 trillion club growing?
Apple could not long remain alone in the club of $ 3 trillion if its technology stocks continued to boom on the stock exchanges. Corporations such as Microsoft (currently worth 2.6 trillion dollars) or Alphabet (1.9 trillion dollars) are pretty much favored by investors with their business models and further growth prospects. For large parts of the economy and society, the corona crisis is a kind of catalyst for further digitization – and American technology companies are setting the tone here. Above all, Apple has the consumer markets firmly under control with its computers, programs and services. Last but not least, this pays off on the stock market.
When Apple first introduced the iPhone to the public in January 2007, the company was valued at $ 73 billion. A decade and a half and around a dozen model generations later, the smartphone with the apple logo on the back is still a best seller and one of the best-selling devices in history. In the past fiscal year alone, Apple made $ 192 billion from the sale of iPhones – almost 40 percent more than in the previous year. That was twice as much as was achieved from the sale of Mac computers, iPad tablets and so-called wearables such as smartwatches. On total sales of $ 365 billion, Apple had operating income of $ 108 billion and net income of $ 94 billion.
In the largest American share index, the S&P 500, Apple now accounts for 7 percent of the total index value. In doing so, the company broke the record set by IBM, which in 1984 had reached 6.4 percent in the stock index of the 500 largest listed US companies.