Apple Inc is first $1 trillion American company

Gladys Abbott
August 4, 2018

Apple officially reached a market capitalization of $1 trillion as it stock surged again Thursday, making it the first US company to hit the massive valuation.

In 2015, Apple joined the Dow Jones Industrial Average, one of capitalism's most exclusive clubs.

Interestingly, Apple is not the first company globally to ever hit $1 trillion in market capitalization.

"We think the lesson Apple's management has learned from the iPhone X [which retails from £999] is when you sell a smartphone for more than $1,000 you can sell fewer units and still reap the financial benefits", DA Davidson analyst Tom Forte said.

With a price/earnings ratio of 18, Apple is trading at an unbelievably low value compared to its industry peers.

Cook's comments come after a stellar fiscal third quarter - the best in the company's history - in which Apple posted a revenue of $53.3 billion and net income of $11.5 billion. Under Cook's stewardship, Apple has continued its meteoric climb, doubling its annual revenue to reach to $229 billion and quadrupling its stock since he took the reins.

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True, Apple's earnings growth rate is slowing down. Apple is the first American public company to hit the mark.

The iPhone maker was named as the only publicly listed U.S. company to be valued at $1,000,000,000,000 just before 5pm this afternoon. In a call with investors, CEO Tim Cook also touted growth in other areas such as smart home products, wearables, and services like the App Store and Apple Pay.

Amazon is in second place at $866bn, followed by Alphabet, the parent company of Google, at $843bn.

The milestone also means that Apple is worth more than just about any country on the planet, there are only 16 that it is worth less than.

"In Kuwait, the iPhone dominates; everywhere you go you'll find an Apple device", said self-described Apple enthusiast Kuwaiti Nawaf Al-Suwaiyed. But since this calculation is based on outstanding shares in early May and, more importantly, not counting the number of shares Apple has bought back recently, it leads us to the higher $206.49 figure earlier mentioned.

Originally founded as a maker of computers in 1976, Apple expanded to dozens of product categories in the 1990s, many of which were unsuccessful. If the stock price experiences a lot of correction due to market instability, Apple could easily lose its high valuation.

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