Apple becomes the first company to hit $3 Trillion market value

iPhone makers became the first company to cross $1 Trillion in August 2018

Apple on Monday became the first company to hit a $3 trillion (roughly Rs2,23,75,950 crore) stock market value, before ending the day a hair below that milestone, as investors bet the iPhone maker will keep launching best-selling products as it explores new markets such as automated cars and virtual reality.

On the first day of trading in 2022, the Silicon Valley company's shares hit an intraday record high of $182.88 (roughly Rs13, 640), putting Apple's market value just above $3 trillion (roughly Rs2, 23, 75,950 crore). The stock ended the session up 2.5 percent at $182.01 (roughly Rs13, 570), with Apple's market capitalization at $2.99 trillion (roughly Rs2, 22, 97,330 crore).

The world's most valuable company reached the milestone as investors bet that consumers will continue to shell out top dollar for iPhone devices, MacBook gadgets and services such as Apple TV and Apple Music.

"It's a fantastic accomplishment and certainly worthy to be celebrated," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "It just shows you how far Apple has come, and how dominant it is seen as in the majority of investors' eyes."

According to Refinitiv, Apple shared the $2 trillion (roughly Rs1, 49, 11,080 crore) market value club with Microsoft, which is now worth about $2.5 trillion (roughly Rs1, 86, 41,425 crore). Alphabet, Amazon, and Tesla have market values above $1 trillion (roughly Rs74, 56,570 crore). Saudi Arabian Oil is valued at about $1.9 trillion (roughly Rs1, 41, 67,825 crore).

"The market is rewarding companies that have strong fundamentals and balance sheets, and the companies that are hitting these sort of huge market caps have proven they are strong businesses and not speculation,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

Under Tim Cook, who in 2011 became chief executive following Jobs' death, Apple has sharply increased its revenue from services like video streaming and music. That helped Apple reduce its reliance on the iPhone to about 52% of total revenue in fiscal 2021 from over 60% in 2018, pleasing investors worried the company relied too much on its top-selling product.

Before joining Apple, Tim was vice president of Corporate Materials for Compaq and was responsible for procuring and managing all Compaq’s product inventory.

Tim also spent 12 years with IBM, most recently as director of North American Fulfillment where he led manufacturing and distribution functions for IBM’s Personal Computer Company in North and Latin America.

In 2018 Apple became the first company to ever be worth $1 Trillion, an achievement that took 42 years. Two years later, it surged past $2 Trillion.

“When we started, we thought it would be a successful company that would go on forever. But you don’t really envision this,” said Steve Wozniak, the engineer who founded Apple with Steve Jobs in 1976.

“At that time, the amount of memory that would hold one song cost $1 million.”

In China, the world's largest smartphone market, Apple continued to lead for the second straight month, beating rivals such as Vivo and Xiaomi, recent data from Counterpoint Research showed.

With Tesla now the world's most valuable automaker as Wall Street bets heavily on electric cars, many investors expect Apple to launch its own vehicle within the next few years.

"The icing on the cake, which may turn out to be the cake, is the potential for an EV car," Rhys Williams, chief strategist at Spouting Rock Asset Management said.

Just as Apple's market capitalization hits the $3 trillion milestone, its share price as a percentage of the Nasdaq 100 index's (.NDX) value is bumping up against a key technical level. In recent prior times, the stock price has risen above such a level and then subsequently declined.