Apple Inc (NASDAQ:AAPL) briefly became the first company in the world to reach a stock market value of US$3trn on Monday, before dipping below that milestone again.
On the first trading day of 2022, the iPhone maker's shares hit an intraday record high of US$182.88, giving it a market cap of just over US$3trn. The shares ended the day 2.5% higher at $182.01, equivalent to a market value of US$2.99trn.
The milestone came around 16 months after Apple’s market value hit US$2trn and under three and a half years after it reached the US$1trn mark.
Apple shares rose by over 40% in 2021, boosted by a surge in demand for technology during the COVID-19 pandemic.
The only other company worth over US$2trn is Microsoft Corp, while Alphabet Inc (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN) and Tesla Inc (NASDAQ:TSLA) all have a market cap above US$1trn.
This was another watershed event for Big Tech, said analyst Dan Ives at US broker Wedbush and was driven by Apple's Services business, which he views as worth half the total value of the company on a standalone basis.
On a sum-of-the-parts basis, Wedbush believe Apple is worth US$3.5trn-plus.
“Hitting $3 trillion is another historical moment for Apple as the company continues to prove the doubters wrong with the renaissance of growth story playing out in Cupertino," Ives said.
“The linchpin to Apple's valuation re-rating remains its Services business which we believe is worth $1.5 trillion in the eyes of the Street, coupled by its flagship hardware ecosystem which is in the midst of its strongest product cycle in over a decade led by iPhone 13. The Services business is further monetizing the Apple golden installed base and poised to reach $100 billion + annual revenue by 2024. We maintain our OUTPERFORM rating and $200 price target. Our bull case is $225."
Lee Wild, head of equity strategy at broker Interactive Investor, said the event made for a notable start to 2022, after hovering near the margin number for a few weeks.
“Covid cases may have surged around the world, but traders continue to back the US economy and corporate profits to keep underpinning stock prices. That’s despite the ongoing threat of high inflation and interest rate rises through 2022," Wild said.
“It’s been an amazing ride for loyal Apple shareholders. Ten years ago, you could still have bought the shares for less than $15. In August 2018 they were worth around $57, taking the valuation above $1 trillion for the first time. Just two years later the business was worth over $2 trillion.”