In April 1976, Steve Wosniak and Steve Jobs found this small company and later on August 2nd of 2020, Apple became the first US public company to hit $1 trillion. Now again, after two years of gape, Apple has become to the first publicly-traded company of U.S to hit another milestone of $2 trillion.
Earlier in March 23rd when the pandemic started, Apple closed only $224.37 making its presence known in the U.S. At the time that would have thoughts it would be doubled after few months as the Apple’s stock reach at $462.83 today which is double of the March amount.
With the sudden rise of $462.83 stock, it crossed the state-owned oil giant Saudi Aramco and took the title of US’s as well as world’s most valuable publicly-traded company. Apple hits $2 trillion marks after the company recorded $59.7 billion during its fiscal third-quarter earnings report released on July 30th.
According to the CNBC report, Apple gained 60% on its stock prices this year following the footpath of Apple CEO Tim Cook. They think that maybe Apple is trading less like a tech hardware outfit more like a naughty software firm.
You can also check Apple’s price-to-earnings ratio (PE), which shows that the company is traffic at 33 times earnings. If we compare it with the Microsoft and Amazon, software leader Microsoft trades at 36 times earnings while Amazon’s stock has a PE over 123.
So Edward James analyst Logan Purk says, “Over the past four months, the market has really been valuing Apple as a software company. The services business is growing nicely — it seems to give them a multiple over 30, and gives them all the credit in the world for this subscription business. They’re starting to get compared to some really big software heavyweights.”
Back in 2015, when iPhone shipments peaked, Apple decided to increase selling recurring subscriptions to the large number of iPhone users worldwide instead of concentrating on the selling of new iPhone models.
Hence the company set the goal of doubling its Services revenue from the $25 billion earned in the fiscal year 2016 to $50 billion by this fiscal year. And three quarters into fiscal 2020, the company has generated $39.2 billion in Services revenue; barring a major global economic meltdown in the current quarter, Apple should hit at least $50 billion in Services revenue for this fiscal year. These services include includes ApplePay, the App Store, iCloud, iTunes, Apple Arcade, Apple TV+, Apple News+, AppleCare+, Apple Music, and more. With these services, they targeted its 1 billion active iPhone users around the world.
As the stock hit the tremendous high point, Apple boss Tim Book included to the billionaire’s club. It’s been nine years since Steve Jobs leaves the position to the Tim Cook and during that time, Apple’s valuation has soared from $348 billion to $1.9 billion.
At the end of this time, Apple will distribute its shares to 4 for 1. Hence, those investors with 100 shared of Apple that that currently trades at $462.83, will own 400 shares trading at (approximately) $115.71. It seems like something exciting with Apple now. If you have any thoughts regarding the future of Apple’s stock, please do share with us through the comment section.