Apple’s market cap briefly tops $3 trillion after relentless rally

Apple’s stock-market value briefly rose above $3 trillion on Monday, shattering yet another record and underscoring how the pandemic has turbocharged big tech’s decades-long rise.

Apple shares rose as much as 3 per cent to trade at $182.88 in afternoon trading in New York before paring some of its gains. Since a low hit in early October, Apple has added about $700bn to its market capitalisation.

The iPhone maker’s share price has marched steadily higher for years, leaving it up more than 200 per cent since Covid first sent the world into lockdown in early 2020 and underlined the centrality of technology for work, education, entertainment, and keeping connected. These are all markets that Apple touches on deeply through its hardware, software, and media services, and that has contributed to it becoming the first company in history to hit $3 trillion, roughly 17 months after it first crossed the $2 trillion mark.

Concerns have bubbled up in some corners – about a shortage of chips, reports of iPhone demand starting to taper off and the prospect of rising interest rates – but investors large and small have focused on the global popularity of Apple’s products, the potential of new products to maintain its steady sales growth, and the company’s strong cash balance as reasons to keep buying the stock day after day.

“I never thought I’d see a $3 trillion market cap, but it really speaks to Apple’s prospects over the next five to 10 years,” said Patrick Burton, co-portfolio manager of the MainStay Winslow Large Cap Growth Fund, which holds about 2.75 million Apple shares. “We feel very good about the outlook, and continue to see meaningful opportunities ahead, with a stable iPhone franchise and growth drivers from both services and new products. It has really been a great growth stock, and the valuation is sustainable.”

The company’s unprecedented size means it has a pronounced influence on the overall equity market; its weight within the S&P 500 Index is 7 per cent. As a point of comparison, Apple isn’t far from equaling the entire Russell 2000 index, whose value is $3.51 trillion.

The stock first reached $1 trillion in value in mid-2018, and achieved a $2 trillion valuation in August 2020. While it was the first US company to surpass that level, Saudi Aramco was the first $2 trillion company overall.

Ever since it first became the world’s most valuable stock in 2011 — when its market cap was under $340bn and it comprised about 3.3 per cent of the S&P 500 – Apple has rarely been far from the title. It briefly fell behind Microsoft Corp. in October, after warning about the impact supply-chain issues would have on its holiday quarter, though that second-place status was short-lived.

Over the past month, the stock has risen almost 13 per cent, compared with a 3.3 per cent rise in Microsoft, which now has a valuation above $2.5 trillion.