Apple's shares reached a new high on Wednesday, closing at $197.96, a 1.7% increase for the day. This surpasses its previous all-time closing high of $196.45 set on July 31. In an impressive rally, Apple's shares have soared by 52% this year, resulting in a market value of $3.08 billion.
Exceeding the Trillion-Dollar Milestone
Apple's market cap has surged by approximately $1 trillion over the course of this year. This accomplishment is notable, especially considering that only five U.S. companies are currently valued at or above $1 trillion. Microsoft has also experienced a similar gain, matching Apple's trillion-dollar increase.
The Elite Group
Aside from Apple and Microsoft, there are only three other publicly traded U.S. companies that hold a valuation higher than $1 trillion. These include Alphabet, Amazon, and Nvidia.
Success Despite Challenges
Despite experiencing four consecutive quarters of declining year-over-year revenue, Apple has managed to achieve this remarkable rally in its stock price. While iPhone revenue has seen a slight increase of 3% in the latest quarter, Mac revenue has plummeted by 34%, and iPad revenue has dropped by 10%. However, the company's services revenue has shown improvement with a growth of 16% in the same period. This growth in services has counterbalanced the weakness observed in most hardware categories. Apple has projected that its revenue for the December quarter will remain relatively flat compared to the same period last year, falling short of the previously forecasted 5% growth by Wall Street analysts.
Apple's Focus in 2024
In 2024, Apple investors will be eager to see the potential for renewed growth in iPhone demand and the continued expansion of the company's services arm. Additionally, there is great anticipation surrounding the expected launch of Apple's Vision Pro mixed reality headset in the same year.
The Lawsuit Against Google
One unpredictable factor that could impact Apple's future is the ongoing lawsuit between the Justice Department and Google. The government claims that Google unfairly solidified its dominant position by paying Apple billions each year to be the default search option on iPhones and Safari web browsers. If Google loses this case, Apple may have to find alternative sources of revenue, potentially affecting its financial stability.
The Role of AI
Investors are also waiting for Apple to provide clarity on its strategy regarding generative AI. While the company has mentioned investments in AI, no product plans have been announced yet. This leaves room for speculation and curiosity among analysts and shareholders.
Apple shares continue to be popular among investors. However, it is worth noting that they come with a price. Currently, Apple trades at more than 29 times Wall Street's consensus earnings estimate for the September 2024 fiscal year, surpassing the price-earnings multiples of other tech giants such as Microsoft, Nvidia, Alphabet, and Meta. In fact, Apple's forward multiple puts it at around a 50% premium in comparison to the S&P 500.
Remarkable Growth Under Tim Cook's Leadership
Since Tim Cook assumed the role of CEO from the late Steve Jobs in August 2011, Apple's stock has skyrocketed by a staggering 17-fold. This remarkable growth showcases Cook's successful leadership and the enduring popularity of Apple products.
ESPN has secured the exclusive rights to broadcast the College Football Playoff until 2031 in a groundbreaking deal worth $1.3 billion per year. The playoff wil...
Shares of technology companies face challenges amid fears of higher interest rates. Tech giants Apple, Microsoft, and others experience declines, while generati...
Victoria's Secret reports a surprising loss of $1.4 million and a decline in sales of 6.2% in the second quarter. CEO remains optimistic for a rebound.