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Apple Set To Become The Second Ever $2 Trillion Company Of The World After Saudi Aramco


08/12/2020


Apple Set To Become The Second Ever $2 Trillion Company Of The World After Saudi Aramco
After a continued rise in its share prices even during the novel coronavirus pandemic, Apple is set to become the first American company to reach a valuation of $2 trillion. This rise of the company also underscored the value of its iPhone ecosystem.
 
Compared to the lows reached in March, shares of the company have almost doubled in a breathtaking stock market performance that has increased the net worth of its CEO Tim Cookto $1 billion for the first time, showed data compiled by a Bloomberg Billionaires Index.
 
As of Tuesday, the market capitalization of the company was at about $1.87 trillion, which was more than the market cap of Apple’s tech peers Amazon and Microsoft with both at $1.54 trillion and that of Google parent Alphabet which was at $1.0 trillion.
 
If the $2 trillion mark is surpassed by Apple, it would be the only company other than the Saudi oil giant Saudi Aramco to cross that mark ever in modern human history.
 
During the novel coronavirus induced lockdowns, a number of the large tech firm have seen robust demand and their share price shooting up. However Apple has eclipsed the performance of its tech peers as the company delivered very strong sales of its gadgetry, including wearables and tablets. Apple also saw increased demand during the pandemic for  its new apps and services.
 
"Apple has been wildly successful in building out its platforms, mitigating the fact that iPhone sales had peaked, by building products that surround it and services that enhance it," said Avi Greengart, analyst with the consultancy Techsponential.
 
"It all feeds back into the cycle for Apple."
 
There was an 8 per cent growth in the profits of Apple for the latest quarter ending in June to reach $11.2 billion against revenues of $59.7 billion, which was 11 per cent more, year on year.
 
Driven by higher demand and delivery of the new entry-level iPhone SE, there was a modest rise in smartphone revenue for the company during the quarter. Apple also reported strong sales of its iPads and Mac computers as people worked from home and children were forced to study from home because of the pandemic.
 
With the company expanding its offering in music, digital payments, streaming television, boosted the revenues for its App Store, about one-fifth of the total revenues of Apple for the quarter was accounted for by its services segment. And with growing interest in health and fitness applications, Apple has also extended its lead in the smartwatch market.
 
"Apple entered the pandemic strong and the company's products are an even more foundational part our lives today as we work, live, and play from home," said Gene Munster of Loup Ventures in a research note.
 
Investors and markets were apparently surprised by the strong performance of Apple, said Goldman Sachs analyst Rod Hall, and added that "consumers and institutions are clearly spending even more than we had anticipated to support both work from home and study from home."
 
(Sourcee:www.channelnewsasia.com)


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