Coverage: Apple hits the $1 trillion market cap mark
Apple Inc. hit a market capitalization of $1 trillion on Thursday as the iPhone maker became the first publicly traded U.S. company to reach $1 trillion.
Sara Salinas of CNBC.com had the news:
The stock gained 2.92 percent during trading after a strong fiscal third-quarter earnings report earlier this week to close at $207.39. It reached the trillion-dollar milestone just before noon ET with a share price of $207.05, based on a recently adjusted outstanding share count of 4,829,926,000 shares.
Investors had previously been looking for a share price of $203.45 to push Apple across the finish line in the race to $1 trillion, but the company’s hefty stock buybacks moved the threshold higher Wednesday.
“I think it just speaks to just how powerful the Apple ecosystem has become over the last few decades,” GBH Insights analyst Dan Ives told CNBC after the historic market move. “This is not the end, that they hit $1 trillion. I view this as just kind of speaking to a new stage of growth and profitability.”
Ives credited the company’s growing software and services revenuewith driving the valuation. The catch-all category — which includes the App Store, AppleCare, Apple Pay, iTunes and cloud services — posted record revenue of $9.55 billion for the June quarter.
Eli Blumenthal of USA Today puts the number in context:
Apple’s biggest smartphone rival has been Samsung and its Galaxy S and Note line of smartphones. While Apple doesn’t have enough money to buy Android-maker Google, the company could purchase Samsung, which is worth $326.44 trillion South Korean Won, or about $289.4 billion in U.S. currency.
Apple not only would benefit from owning the Samsung maker, but also get the South Korean giant’s impressive manufacturing capabilities, which Apple already uses to make some parts for its own products.
Buy Disney, Netflix and AT&T
Apple has been making moves to build out its streaming content portfolio, but why not take a shortcut and pick up three of the biggest content makers in the world? With $1 trillion, Apple can go out and buy The Walt Disney Co. (market cap of $168.16 billion), Netflix ($146.94) and AT&T, which recently purchased HBO-owner Time Warner($234.48), and still have roughly $450 billion left over.
Who wouldn’t subscribe to a streaming service that has “The Avengers,” “Star Wars,” “Stranger Things” and “Game of Thrones”?
Matt Phillips of The New York Times wrote that the milestone indicates the significance of mega companies:
But Apple’s new 13-figure valuation also highlights how a group of enormous companies has come to dominate the United States economy. Today, a smaller cluster of American companies commands a larger share of total corporate profits than since at least the 1970s.
The impact of this phenomenon has been clear in the stock markets, where a band of household-name companies — led by Apple, Amazon, Facebook and Google — has fueled the nine-year bull market, the second-longest behind the rally that ended in 2000. Their successes also are propelling the broader economy, which is on track for its fastest growth rate in a decade.
But the effects of the consolidation of corporate profits extend far beyond the stock markets — and they are not entirely benign.
Economists, for example, are starting to look into whether the rise of so-called superstar firms is contributing to the lackluster wage growth, shrinking middle class and rising income inequality in the United States. The vast social and political influence wielded by these megacompanies has prompted some lawmakers to demand more regulation to rein them in.