Shares and capitalization of Apple

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2024: Loss of business innovation and maintaining capitalization through dividends and share buybacks

Apple's multi-trillion-dollar capitalization with prohibitive multiples did not arise out of thin air - behind all this are hundreds of billions of dollars in shareholder policy costs (dividends and byback).

Many companies, especially in the technology sector, initially adhere to the concept of aggressive expansion, completely moving away from shareholder payments, but sooner or later the moment comes when the market bills - either a rapid expansion strategy (growth stories) or the disposal of cash into the market.

The market is extremely ruthless and mercilessly declassifies former favorites if something goes wrong, finding itself a "new victim" and a hype object of the greatest concentration of attention.

By May 2024, Microsoft and Apple are competing for the status of the most expensive company in the world with a capitalization of plus or minus about $3 trillion, but behind this fabulous assessment lies not only the hype of speculators, investments of the largest funds, but also the incredible support of the companies themselves, Spydell Finance wrote.

In world history, there was no company that paid shareholders over $600 billion for the entire period of public activity, but now this company is Apple, whose payments until March 2024 amounted to $830 billion, and according to plans for a bike and dividends, by 3Q 2025, total payments will exceed $1 trillion.

Until 3Q 2012, Apple "prevailed" from paying shareholders, practically paying nothing, with the rare exceptions of chaotic payments near zero. Since 2013, they have gone into overdrive in order to reach about $100 billion in total payments (divas + byback) by mid-2021, and in 2025 payments may exceed $125 billion.

The amount of payments from Apple is prohibitive - comparable to the entire reserve of the NWF of Russia, both liquid and illiquid. Regarding Apple's capitalization, shareholder policy takes only 3.3-3.5%, which is quite insignificant.

Apple has ceased to be a growth story since 2018 and is in the holding phase of financial performance amid growing competition from Chinese manufacturers and a pervading internal bureaucracy.

Any large company always loses flexibility and loses the impetus of technological development, while having almost unlimited resources - a paradox? Far from it.

The larger the business, the higher the inertia and higher the responsibility for the decisions made, the higher the price of error and the deep fear of incorrect strategic decisions. The time for coordination of both strategic long-term solutions and operational management increases, which leads to a loss of maneuvering ability in a dynamic market environment.

Conservatism is a form of avoidance where the innovative spirit is blurred and smeared about corporate philosophy, which tends to hide a fear of change and movement outside the formed vector, fearing problems in communication.

The scale of the business involves expanded obligations to customers, counterparties, creditors and investors, which leads to fear of innovation, heavier corporate procedures, and a focus on stability.

The more resources the company has, the more difficult it is to respond quickly to market changes.

Apple's panic throwing from/ VR, AR attempts to create electric vehicles to - AI projects - is a consequence of adjusting to the formed trends, and not creating your own trends.

Previously, Apple created industrial and technological trends, by 2024 it only shamefully follows the industry with a delay of 3-4 years.

Apple, for at least the last 5-7 years, has ceased to be an innovative company offering fundamentally new solutions, which in turn is a consequence of "economies of scale."

In the tech industry, large companies devour small companies, but it is startups that tend to create technology trends, as shown by the recent rise of OpenAI.

Dominance cannot be eternal. The market does not take into account past achievements. Apple will no longer be able to become a growth company and the only chance to maintain 3 trillion capitalization is to burn over $100 billion in cash per year, but this is impossible in the long term.

2022: The world's most valuable company with a capitalization of $2.5 trillion

As of March 11, 2022

2021

The capitalization of the company was the first in the world to reach $3 trillion

After decades in which the company Apple has been one of the most successful in the world, its market value in December 2021 is approaching $3 trillion. That's more than the entire stock market. Germany Or. UK economy

The iPhone maker needed to climb another 6% to become the first company to reach that milestone, less than four years after it surpassed the $1 trillion mark for the first time.

At the end of 2021, the figure of $3 trillion was exceeded.

Apple's capitalization exceeded CAC40 and DAX30

Comparison of the capitalization of Apple and companies from the stock indices of France and Germany CAC 40 and DAX 30.

2020: Capitalization exceeded $2 trillion

In August 2020, Apple's capitalization exceeded $2 trillion.

2019

​​Apple is worth a trillion dollars again

​​Apple is worth a trillion dollars again, September 2019

Bloomberg recommends selling Apple shares

On July 9, 2019, it became known that according to the rating, Bloomberg 5 Wall Street analysts recommended selling Apple Inc shares: this is the largest number of SELL recommendations on the company's shares since 1997. What's the reason? A number of Apple's financial and operational performance has deteriorated significantly amid the trade conflict between and. USA China

In January 2019, for the first time in almost 20 years, the IT company lowered its expectations for the company's revenues in the first quarter of the 2019 fiscal year with the end of December 28 - mainly due to lower sales in China. A similar situation was observed in the second quarter of the 2019 fiscal year with the end of March 30, following which Apple recorded a decrease in revenue by 5.1% yoy - to $58 billion, and net profit by 16.4% yoy - to $11.6 billion.

At the same time, despite the deterioration in financial performance in the last two quarters, since the beginning of the year, Apple shares have risen by 28% - to $200.02 per share against the background of an overall increasing trend on American stock exchanges. In addition, Apple's share quotes were supported by a $100 billion share buyback procedure, which the company has been conducting since May 2018. At the same time, in May 2019, Apple announced that it would additionally redeem its own shares for $75 billion, and also announced an increase in quarterly dividends by 5% YoY to $0.77 per share.

Nevertheless, more and more analysts agree that these measures are no longer enough to further increase the value of Apple shares. Citibank said Apple's sales in China could halve due to the company's less favorable image amid trade differences between Beijing and Washington. In January-March 2019, 17.6% of the company's revenue came from Greater China.

Thus, given the negative dynamics of Apple sales in the medium term, the company's shares are likely to mark only a slight increase or show a decline^[1]

2018

Microsoft ahead of Apple to become the most expensive company

On November 23, 2018, Microsoft became the world's most expensive company, ahead of Apple for the first time in a long time. Shares of the latter are getting cheaper due to weak demand for new iPhones. Read more here.

Capitalization growth to $1 trillion

On August 2, 2018, Apple's market capitalization exceeded $1 trillion. Another company managed to achieve such a value 11 years ago, but then only the technical factor played.

During trading on the Nasdaq exchange on Thursday, August 2, the value of Apple shares rose by 3% to $206.9, and the company's capitalization reached $1.006 trillion.

The rise in Apple quotes came after the release of financial statements: revenue and profit of the consumer electronics manufacturer were higher than analysts' expectations. On August 1, 2018, when the quarterly report was released, Apple's capitalization rose by $990.4 billion, and the next day, thus, the company obeyed the $1 trillion mark.

Apple capitalization reaches $1 trillion

An accurate estimate of Apple's value, which is calculated as the product of the share price by their number, is difficult due to the fact that the company has a large-scale share buyback program. For example, in the first quarter of 2018, an ode. she bought them for $22.8 billion, and three later - for $20 billion (this is a record volume of quarterly buybacks among all companies in the S&P 500 index). As a result, in six months, the number of Apple shares fell to almost 4.83 billion.

In history, there was a case when the company's capitalization reached $1 trillion, but this happened once and only as a result of a market incident. In November 2007, oil giant PetroChina, whose shares were already trading in Hong Kong and New York, also listed them on the Shanghai Stock Exchange. Thanks to a large-scale increase in the number of shares and a jump in quotations on the first day of trading almost three times as a result of a rush purchase on the mainland exchange, the company's capitalization exceeded $1 trillion. But it lasted only one day. By early August 2018, PetroChina is worth about $195 billion.

GBH Insights analyst Dan Ives connects the rise in Apple quotes with the powerful development of the company's ecosystem over several decades. Experts believe capitalization will continue to grow as Apple enters a new stage of growth and profitability. ^[2]

Apple shares rise 24% thanks to optimism around iPhone X

Over the 12-month period, which ended on May 11, 2018, Apple shares rose 24% thanks to investor optimism around the iPhone X. However, demand for the flagship smartphone, which costs from $1,000, disappointed investors, so a further rise in quotations ensured the company's focus on returning more capital to shareholders. 

In May 2018, a repurchase of shares worth $100 billion was announced. Coupled with the release of financial indicators above Wall Street expectations and a significant increase in Warren Buffett's stake in Apple's equity, the corporation jumped 12% in a few days. As a result, Apple is just 4% short of the trillionth mark of market capitalization.

Comparison of the ratio of share value to expected profit

Many analysts cited by Reuters have already raised their forecast for the target value of Apple shares to a level that corresponds to a capitalization of more than $1 trillion.

Annual revenue of the five largest IT companies is approaching $700 billion

In addition to Apple, Amazon is approaching this milestone, and the Internet giant is doing it faster. By May 11, Amazon's quotes had jumped 70% in the previous 12 months and reached a level at which the rate was 107 times higher than expected profit. For Apple, this difference is 15 times, although the company makes more profit. Some analysts admit that Amazon will be able to achieve a value of $1 trillion faster than Apple.^[3]

Warren Buffett buys 75 million shares of Apple and enters the top three shareholders

In the first quarter of 2018, Warren Buffett bought 75 million shares of Apple and entered the top three largest shareholders of the American corporation. Read more here.

2017

Capitalization increase to $900 billion

After the publication of financial results for fiscal year 2017, which were higher than Wall Street expectations, Apple's quotes jumped 3.1% in electronic trading on November 2, 2017. At some point, the company's market capitalization exceeded $900 billion, but then fell to $868 billion. Given the release of the anniversary iPhone X, Apple may well become the world's first company worth more than $1 trillion. By November 2, 2017, it is the most expensive corporation in the world.

Apple's further rise will depend on the demand for the iPhone X. Tim Cook called the interest in the smartphone "very, very high," but the press has repeatedly reported on the possible shortage of the smartphone due to the problems that Apple faced in the serial production of OLED displays and face scanners for iPhone X.^[4]

Capitalization growth to $800 billion

On May 9, 2017, Apple became the world's first company worth more than $800 billion. With the current dynamics of quotations, the California giant may exceed $1 trillion by the end of 2017.

By the close of the exchange on May 9, 2017, the value of one Apple share reached a record $153.96, which is 0.6% more than the level of the previous day. As a result, the company's market capitalization amounted to $802.72 billion, which has never happened in its history.

Apple became the world's first company worth more than $800 billion

Apple's capitalization exceeded $700 billion on February 10, 2015. Thus, 565 exchange sessions were spent on increasing the figure by $100 billion, which became the fifth longest period when overcoming such a significant mark, the MarketWatch edition notes.

The fastest push was made with an increase in value from $400 billion to $500 billion - it took only 29 exchange days (from January 18 to February 29, 2012). The most protracted was overcoming the first $100 billion: by August 27, 1999, Apple needed 6676 sessions.

According to analysts at RBC Capital Markets, Apple's market capitalization in 2017 may rise to $824 billion. In turn, Drexel Hamilton analyst Brian White believes that Apple shares could rise in price to $202 per paper within 12 months, and if its forecast comes true, the manufacturer's capitalization will exceed $1 trillion, Bloomberg notes.

According to Reuters observers, the $1 trillion mark will be submitted to Apple by the end of 2017. The capitalization of $800 billion was achieved despite the fact that a week earlier the company reported revenue and sales of smartphones below Wall Street forecasts.

Since the beginning of 2017, Apple shares have risen in price by 33%, since the presidential election USA in November 2016 - by almost 50%. The company accounts for almost 4% of the S&P 500 index, the total capitalization of which is $21.7 trillion.^[5]

2016: Carl Icahn sells all Apple shares

At the end of April 2016 Carl Icahn , he announced the sale of all his shares Apple due to concerns about the development of the company's business in the Chinese market. Against the background of this statement, the quotes of the American manufacturer electronic engineers fell. More. here

2015: The world's most valuable company - $700 billion

At the beginning of 2015, Apple for the first time in the history of world business crossed the $700 billion mark in terms of market capitalization. This is more than twice the cost of the company's longtime competitor, Microsoft.

2012: Apple's capitalization breaks world record with $600bn

On April 10, 2012, Apple's capitalization reached $600 billion. Thus, the company came close to Microsoft's record of $619 billion: as much as the company was estimated on December 30, 1999, today it costs less than $255 billion. And in August 2000, General Electric came close to the $600 billion bar.

Apple took the previous capitalization barrier, $500 billion, quite recently, on February 29, 2012. This is also a very important stage for the company, since only five US companies are rated so high at the moment. A number of analysts believe Apple could achieve even better results.

One of the record values ​ ​ of the capitalization of companies in the world is the capitalization of the largest Chinese oil company PetroChina, which in 2007 reached a value of $1 trillion on the Shanghai Stock Exchange. True, the company is also traded on the Gon Kong and New York exchanges, and there the company's value has never exceeded $500 billion.

On August 20, 2012, Apple's capitalization reached $624 billion, an absolute world record for the company's value. Thus, the corporation exceeded even the bar set by Microsoft in the wake of the Internet boom of the past decade.

Apple shares have soared again as investors feel optimistic about the imminent release of the new smartphone iPhone 5 and possibly a more compact and inexpensive iPad. Apple holds the status of the company with the highest capitalization in the world since the end of 2011. At the moment, the gap from Exxon Mobil, which ranks second in the world, is about 54%. On August 20, 2012, after the close of trading, Apple's share price was $665.15, up 2.6% from Friday August 17.

According to Standard & Poor's, for comparison, in 1999, Microsoft's capitalization reached $620.58 billion. Apple outperformed Microsoft excluding inflation. But, if we take this parameter into account, then the cost of Microsoft as of December 30, 1999 was about $850 billion, now the company's capitalization is about $257 billion.

At the same time, analysts believe that Apple securities have not exhausted the limit for growth. The average price they call in their forecasts is $745.8. Apple shares are in many investment portfolios, its contribution to the S&P 500 index is 4.7%. Interestingly, Apple's stock price for August 2012 came close to the price of its first computer, the Apple I, which cost $666.66 in 1976.

2010: Apple becomes more expensive than Microsoft. Capitalization $236.4 billion

In May 2010, Apple overtook the former IT industry leader Microsoft in market capitalization.

As of September 2010, Apple's capitalization reached $236.4 billion.

2008: Capitalization $159.37 billion

Capitalization as of August 13, 2008 amounted to $159.37 billion.

2007: Capitalization over $100 billion

In May 2007, the company's market value exceeded $100 billion. At the same time, Apple was first included in the S&P 100 rating - one hundred US companies with the largest capital.

1980: Stock Floatation

In 1980, the company's staff was already several hundred people, products were exported outside the United States, Apple shares received the AAPL index. Apple III was announced, however, for a number of reasons, the project was not popular. On December 12, 1980, Apple listed a primary stake on the stock exchange, and 40 of its employees got rich overnight.

Notes