Apple Back on Track for $1 Trillion Market Cap

May 1, 2019
511 Views

Apple (NASDAQ: AAPL) became the first company to hit a $1 trillion market cap, in August of last year. Stock then suffered in the volatile fourth quarter but has steadily gained in 2019. It is up 27.22% year to date. With a market cap of $964.79 billion, Apple is close to hitting $1 trillion again.

The latest earnings data has reignited confidence in the market, giving investors hope that stock is ready to climb.

Apple Beats Earnings Expectations

Economists and top analysts warned that earnings would contract in the first quarter of 2019. Investors feared that some of the largest companies would see their revenues sharply decline, as the economy heads towards the end of its growth cycle. While Apple’s figures did decline year over year, they’re still impressive considering the overall market.

The company reported revenue of $58 billion for the first quarter, down from $61.1 billion a year ago. However, the result was better than the $57.5 billion analyst consensus. Apple has also raised its outlook for the current quarter, expecting to generate between $52.5 billion and $54.5 billion. Analysts had only expected to see $52 billion in the period ending June 30th.

Smartphone sales are down worldwide, with the entire industry dropping 6.6% in the first quarter. They only managed to match analyst expectations with $31.1 billion generated from its iPhone unit in Q1.

Not content to rely on the iPhone for growth, the company is investing heavily into services, including Apple Music, the App Store, advertising, cloud services, and the upcoming Apple TV+ streaming platform. Now it has 390 million accounts across all its subscription services. The company added 30 million new subscriptions in the first quarter.

Apple Will Change, but Investors Shouldn’t Worry

iPhone has dominated growth for such a long time that some investors have forgotten about the company’s other strengths. Apple remains one of the world’s most powerful brands, and the growth of its service platforms should offer hope for a future where the iPhone isn’t front and center.

The company earnings beat led to an after hours gain of 4.96% on Tuesday. Shares in the company are still compelling, and with a 1.53% dividend yield, it’s possible to make a moderate income while holding stock for long term growth.

You may be interested

Stock Market Posts Worst Losses Since June
Economy
26 views
Economy
26 views

Stock Market Posts Worst Losses Since June

Adam R - October 29, 2020

The stock market suffered a sharp selloff on Wednesday, with investors concerned about a resurgence in coronavirus infection numbers and…

Walmart Wants Exoneration For Its Role in the Opioid Crisis
Business
51 views
Business
51 views

Walmart Wants Exoneration For Its Role in the Opioid Crisis

Adam R - October 26, 2020

Wholesaler and retailer Walmart Inc. (NYSE: WMT) has filed a new lawsuit asking that it be cleared of any wrongdoing…

The FDA Has Approved Remdesivir as a Coronavirus Treatment
Investing
121 views
Investing
121 views

The FDA Has Approved Remdesivir as a Coronavirus Treatment

Becky H - October 23, 2020

While a COVID-19 vaccine may still be months away, pharmaceutical companies are pushing forward with several viable treatments. Gilead Sciences…