Every year, Forbes releases their rankings for some of the most well-known and successful companies around the world. AAPL company is, once again, the most profitable company in the world.
Apple took top spot in the most profitable companies list despite coming in 9th place on the list of companies listed by market cap. That goes to show how good of a job Apple has done in producing and selling products that people are willing to pay a premium for. Apple is also listed at the number 1 most valuable brand in Forbes rankings. That may be due to the fact that people are willing to pay the aforementioned premium.
Earlier this month, value investor Mohnish Pabrai took part in a Q&A session with William & Mary College students. Q3 2021 hedge fund letters, conferences and more Throughout the discussion, the hedge fund manager covered a range of topics, talking about his thoughts on valuation models, the key lessons every investor should know, and how Read More
To put things in perspective about revenue and profit; WalMart did $485B in revenue while Apple “only” did $215B. However, things change pretty drastically when we look at profit. WalMart made $13.6B in profit compared to Apple’s $45.7B. That’s a huge change, especially considering the gap in revenue between the two companies. Apple is a finely tuned machine that pumps out impressive profit numbers year after year.
This analysis was provided about AAPL company:
After more than a decade of solid growth fueled first by the iPod music player and then by the even more popular iPhone, Apple finally appeared to hit a wall, with lackluster sales “relatively speaking” for other products such as the iPad and Apple Watch and a heavy reliance on upgraded phone models. But the most profitable publicly-traded company in the world is investing heavily in software and its efforts in new areas of opportunity, including automobiles, remain in development (and under wraps).
This is Apple’s second consecutive year as the number one most profitable company in the world. With the iPhone 8 coming in the coming months with a rumored price tag of $1,100 or more, it wouldn’t be surprising to see AAPL company in this same spot next year. It also appears that Apple is still looking to innovate. As mentioned in the quote above, Apple has become involved in the automobile sector. The company is also using its consumer hardware like the upcoming iPhone 8 to make a major push into the augmented reality (AR) space. AR has taken off lately with Pokemon Go being one of the major examples of how basic AR can be successful. Of course, games are just the beginning. If Apple can become the major player in AR then that could be an entirely new revenue stream or a way to help build existing revenue streams.
The story of AAPL company on the Fortune 500 rankings is a bit of a redemption story. Apple spent some time in the 400’s around the mid 90’s and then disappeared off the list, only emerging again in 2005. Now, since 2005, Apple has climbed all the way back to ninth place on the overall list, and first place on the most profitable companies list. Of course, it took a lot of innovation to get Apple back on track. The iPod changed the music industry and became one of the most popular tech products of all time. The iPhone set the standard for what smartphones have become today. Apple has become a leader in business and stock owners are reaping the benefits – especially if they bought prior to 2005.
Where does AAPL company go from here? It’s hard to say. It would be difficult to imagine that Apple somehow takes over top spot in terms of overall revenue. Retailers like WalMart are likely firmly planted in that spot. However, profitability is just as an important a measure as any. If Apple can continue to produce luxury products that people are willing to pay a premium price for then it would be no surprise to see their impressive profits continue. The hype of the iPhone 8 may be the next test in seeing how much people are willing to pay for an Apple product.
As for other tech companies that made the most profitable list, Alphabet, Samsung Electronics, and Microsoft all made the top 15 at 9, 10, and 12, respectively. It’s very exciting to see tech companies leading the way in profitability along with massive companies like investment banks. These companies make the products we love and, hopefully, the profits they earn can help them continue to innovate and impress consumers.