Apple Inc. (NASDAQ: AAPL) has extended its lead as the most valuable company on the stock market. It has broken a new record, becoming the first public company in history to achieve a $2 trillion market capitalization.
It’s a major event not only for the company but for all investors in the market. Stocks have been surprisingly bullish during the Coronavirus Pandemic. Even as America faces one of its worst recessions on record, equities are booming.
Apple has proven that with the right business model and enough confidence from investors, growth is achievable.
Huge Lead in the Stock Market
Apple’s market capitalization record comes at a time when big tech is dominating the investment world.
Amazon, Microsoft, and Alphabet (Google’s parent company) are the next biggest stocks. Amazon and Microsoft have capitalizations close to $1.5 trillion each. Google’s is just above $1 trillion.
To put things into perspective, Apple’s valuation is around 10% of America’s GDP last year. It represents almost 7% of the entire S&P 500 index. No other company has this kind of weighting or profile. Perhaps most importantly, the growth could keep coming.
Apple is preparing a stock split for the end of this month. It won’t change the market cap, but it will make shares more affordable as each one is split into four.
By lowering the price of entry for new investors, there could be an influx of activity. With the news that Apple is the first $2 trillion public company, there will be hype behind the stock.
Why is Apple So Popular?
Apple has consistently displayed an ability to attract discerning customers who are willing to pay high prices for premium products. The company offers a unified experience across its ecosystem, allowing customers to switch between their iPhones, iPads, and Mac computers seamlessly. No other software or device company has achieved anything similar. Microsoft has come close in the past, but it has failed to cement itself in the smartphone market.
Apple is one of the world’s most desirable brands and its products generate significant year over year earnings and revenue growth. This makes it a reliable investment, even in a time like now when the world is facing a global pandemic and recession.
Anyone considering Apple stock for the first time may wish to wait until after the split later this month. A single share will be more affordable, allowing greater flexibility on the investment. With a dividend as well as growth potential, Apple is expected to remain the hottest mainstream pick of 2020.
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