Thanks to this year’s tremendous rally in Apple stock, the company has added almost $200 billion to its market capitalization this year. Unlike last year, Apple has held its position as the most valuable company by market cap. In fact, the company’s market cap has grown so much that it’s now larger than Switzerland’s economy.
Apple no longer battles ExxonMobil
As the year went on, the gap between Apple and the world’s second most valuable company by market cap, ExxonMobil, only grew. It’s no longer a battle for first place between the two companies because their market caps aren’t even close to each other anymore.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
The dramatic increase in Apple’s market cap was noted by 24/7 Wall Street. As of now, Google Finance shows Apple’s market cap at $655.25 billion. That’s still a decline from November when Apple’s market cap passed $700 billion when shares hit a record high. By comparison, ExxonMobil’s market cap is at $395.93 billion right now.
Apple moves away from ExxonMobil quickly
The Financial Times’ Global 500 list demonstrates just how quickly Apple’s market cap rose and moved away from that of ExxonMobil. As of the end of the first quarter, Apple’s market cap was $478.77 billion. At the end of the second quarter, it had grown to $560.34 billion, and at the end of the September quarter, it was $603.28 billion.
In other words, Apple has not only added nearly $200 billion to its market cap since January, but it has also added about $50 billion to its market cap since Sept. 30 despite the hiccup in November when it lost about $50 billion from its all-time high. ExxonMobil, in contrast, saw its market cap grow from $422.1 billion in the first quarter to $432.36 billion at the end of the second quarter. The oil giant’s market cap had slipped to $401.1 billion by the end of the third quarter.
Microsoft remained in third place at $381.96 billion as of the end of the third quarter after battling Google this year, with Google taking the third place position from Microsoft as of the end of the second quarter. As of now, Microsoft is actually battling ExxonMobil for second place with a market cap of about $393.26 billion.
The increase in Apple’s market cap is significantly larger than the increase in Berkshire Hathaway’s, as the conglomerate’s market cap gained about $185 billion this year. Coca-Cola and Verizon each added $186 billion to their respective market caps this year.
Looking into Apple’s 2015
It certainly seems as if the worries that plagued Apple shares last year have pretty much dissipated. Early this year, some investors worried that the iPhone 6 wouldn’t be able to compete with Samsung’s Galaxy S6. However, those concerns were put to rest after it became evident that Samsung’s newest flagship wasn’t doing all that well and then Apple unveiled the iPhone 6 and its larger cousin, the iPhone 6 Plus, finally proving rumors that the company was releasing its first phablet.
Looking forward into next year, analysts are very optimistic on Apple, even more so than they were last year. Morgan Stanley analysts estimate that Apple will have shipped 67 million iPhones in the December quarter and set a price target of $126 per share. As 24/7 Wall Street notes, if Apple shares rise from their current value of around $113 each, Apple would end up with a market cap of around $750 billion.
Activist investor Carl Icahn, who has been pressuring Apple to buy back more shares off and on for about a year now, expects the company’s market cap to eventually soar to $1 trillion. The billionaire still believes share buybacks will be an important factor in that increase. If or when Apple does hit a market cap of $1 trillion, its share price will have doubled since the beginning of this year.