Amazon, Microsoft and Alphabet (Google Owner’s) are locked in a tight race to become the second publicly-listed US company to reach a $1 trillion stock market value after Apple became the first to touch the 13-digit milestone.
Apple has officially become the world’s only trillion dollar publicly traded company, in terms of market capitalization, which is simply the company’s number of outstanding shares multiplied by its stock price.
Apple achieved this milestone by hitting a stock price of $207.05 and above in intraday trading today, giving it a market cap slightly over $1,000,000,000,000, based on its 4,829,926,000 outstanding shares as of July 20, 2018, which the company disclosed in its quarterly 10-Q filing with the SEC on Wednesday.
While some publications declared Apple a trillion dollar company earlier in the day, this was based on an outdated number of outstanding shares in Apple from tools such as Yahoo Finance, which powers Apple’s own Stocks app.
Apple beat out other large tech companies, including Amazon, Microsoft, and Google parent company Alphabet, in the race to a trillion dollars. As with most milestones of this nature, however, Apple reaching exactly a trillion dollar market cap doesn’t have too much significance, beyond the vanity of it.
Apple’s stock has appreciated over eight percent since the market closed on Tuesday, following its record-breaking earnings results. Apple set a new fiscal third quarter record with $53.3 billion revenue, easily topping Wall Street expectations, and there were also indications that the iPhone X is selling quite well.
The milestone is a testament to the strength of Apple, which has already been the world’s most valuable company for several years. Aside from 2016, which is now an outlier, Apple has been steadily increasing its revenue and profits since 2003, fueled by the massive popularity of products like the iPhone and iPad.
Apple will look to build upon its success with a wide range of new products expected later this year, including a trio of iPhones, iPads with Face ID, Apple Watch Series 4 models, updates to several Macs, new AirPods, and much more.
Wall Street’s optimism about last year’s 10th anniversary iPhone, coupled with record share buybacks, have propelled Apple’s stock 34 percent higher over the past 12 months, pushing the company’s stock market value above $1 trillion on Thursday.
The Cupertino, California company’s shares added another 0.4 percent on Friday, putting its market capitalization at $1.005 trillion.
Apple’s 12-month gain is far better than the S&P 500’s 14 percent increase over the past year, but it pales beside Amazon’s astounding 85 percent surge, propelled by the online retailer’s scorchingly fast revenue and profit growth.
Amazon is now the second-largest publicly-listed US company, with a market capitalization of $890 billion, followed closely by Alphabet and Microsoft, at $852 billion and $824 billion respectively.
Google-owner Alphabet’s stock has risen 31 percent over the past 12 months, and is up 17 percent in 2018.
Together with Facebook, the five largest US companies account for 15 percent of the S&P 500.
Synovus Trust portfolio manager Dan Morgan said he owns shares of Amazon mostly because of its dominance of the cloud computing industry, a business that grew 42 percent in the June quarter and provided most of Amazon’s operating profits.
“Of the three companies, I’d say Amazon will get to $1 trillion next,” Morgan said.
Average analyst price targets put Apple’s stock market value at $1.05 trillion, Amazon at $1.02 trillion, Alphabet at $970 billion and Microsoft at $953 billion, according to Thomson Reuters data.
To be sure, past stock gains are not a reliable predictor of future performance, and the surge in Amazon shares in recent years has been exceptional by most standards. But Amazon’s market capitalization would overtake Apple’s later in 2018 if both companies shares were to continue their 12-month growth pace.