Apple Hits $1 Trillion Market Cap, First U.S. Company to Reach Milestone
By Todd Spangler
LOS ANGELES (Variety.com) – UPDATED: Apple officially reached a market capitalization of $1 trillion as it stock surged again Thursday, making it the first U.S. company to hit the massive valuation.
The milestone reinforces the massive power has in the tech world — and with its momentum, the company is poised to further shake up Hollywood with an expected video-subscription launch some time later this year.
Apple’s stock hit a high of $207.05 per share in trading just before noon ET, putting it at the $1 trillion mark. That came after a 5.9% surge a day earlier . Shares vacillated around that threshold, and were trading at $207.52 per share as of 1:45 p.m. ET (up 3% on the day), meaning the company was just over the trillion-dollar point. Apple shares closed Thursday at $207.39 (+2.9%), yielding a market cap of $1.002 trillion.
Earlier Thursday morning, Apple’s own Stocks app (which uses data from Yahoo Finance) incorrectly reported that the company’s market cap was over $1 trillion because it didn’t factor in the reduction in shares outstanding after Apple’s $100 billion stock buyback announced on Tuesday (July 31).
Bullish investors have rallied after the company’s results for the June 30 quarter that handily beat Wall Street forecasts and its upbeat guidance for the September quarter with refreshed products expected this fall.
With a market cap of $1 trillion, Apple has a value greater than the gross domestic product of most countries in the world, including Turkey, Switzerland, Saudi Arabia and Taiwan.
The race to a $1 trillion market cap — symbolic as it is — has been closely watched on Wall Street. Some analysts expected Amazon, which also has continued to turn out stellar earnings , to be first to the mark. On Thursday, Amazon’s market capitalization was around $874 billion.
Apple technically wasn’t the first company to the $1 trillion market-cap mark. That was Chinese oil and gas giant PetroChina, which briefly topped $1 trillion in market value with its IPO in 2007, before the share price declined.
Apple generates billions from hardware sales: It had $29.9 billion in iPhone sales, up 20% year over year, during the June 30 quarter. On top of that, it has built a large and fast-growing business with the App Store, iTunes, Apple Music and other services, which pulled in $9.55 billion in sales in the most recent quarter.
Now Apple is plugging original entertainment into that chain. Last year it hired former Sony Pictures Television execs Jamie Erlicht and Zack Van Amburg, who have a slate of at least 20 original series in development or production with Steven Spielberg, M. Night Shyamalan, Damien Chazelle, Reese Witherspoon and Jennifer Aniston, among others. Apple also inked a multiyear content deal with Oprah Winfrey in June. Apple so far has remained mum about how it will release the original programming, but industry observers expect it to be a subscription-based model.
