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For the first time ever, Apple Inc. has reached a stock market value of over $3 trillion.
Apple logo on a building wall. Image credit: Blake Patterson via Flickr, CC BY 2.0
This milestone was achieved on Friday as Apple’s shares rose by 2.3% to $193.97, resulting in a market capitalization of $3.05 trillion, according to Refinitiv data. This marks the fourth consecutive record high close for the company.
Improving inflation indicators and optimism regarding Apple’s expansion into new markets have contributed to the stock’s surge.
Alongside other strong-growth stocks like Nvidia Corp and Tesla Inc, Apple saw a significant increase after a Commerce Department report revealed slower growth in the Personal Consumption Expenditure price index for May, indicating progress in the Federal Reserve’s efforts to combat inflation.
The Apple retail store – illustrative photo. Image credit: Jorge Láscar via Flickr, CC BY 2.0
In 2023 alone, Apple’s stock has risen by 49% which was an exceptional jump considering the existing market conditions. This aligned well with a broader optimism among Wall Street’s most valuable companies.
The trend is most likely associated with the market confidence in the U.S. Federal Reserve’s anticipated conclusion of its interest rate hikes. Another important factor driving interest from potential investors is the promising potential of artificial intelligence.
Apple’s recent quarterly report in May showed revenue and profits exceeding analysts’ expectations – the profits and revenue fell, but the situation was better than the market experts predicted.
This trend further solidified its reputation as a secure investment amid global economic uncertainties. Coupled with consistent stock buybacks, these financial results affirm the company’s appeal to investors.
The MacBook. Image credit: Michail Sapiton via Unsplash, free license
Art Hogan, chief market strategist at B. Riley Wealth, commented on Apple’s achievement, praising the company’s growth, diversification of revenue streams, shareholder-friendly management, stock buybacks, dividend distribution, and strong financial position.
“It’s a testament to one of the greatest publicly traded companies that’s ever existed. It continues to grow and diversify its revenue streams, has shareholder-friendly management, buys back shares, throws off a dividend and has a fortress balance sheet with strong and defendable cash flows,” Hogan said.
Vision Pro headset – EyeSight mode. Image credit: Apple
Apple’s $3 trillion milestone comes shortly after the launch of their high-priced augmented-reality headset on June 5, marking a significant venture for the company since the introduction of the iPhone. Since the launch, company’s stock has risen approximately 7%, outperforming the S&P 500’s 4% increase.
Apart from Apple, four other U.S. companies have valuations exceeding $1 trillion: Alphabet Inc, Amazon.com Inc, Nvidia, and Microsoft Corp. Microsoft follows closely with a market value of $2.5 trillion. Companies like Tesla and Meta Platforms Inc have experienced significant gains in their shares this year, with Nvidia’s shares rising by 190%, propelling the chipmaker into the trillion-dollar club.
Written by Alius Noreika
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