At this rate, it’s almost an inevitability. Barring extremely unusual circumstances, Apple Inc. (NASDAQ:AAPL) will become the first company ever to hit $1 trillion market capitalization. No one, not Amazon.com, Inc. (NASDAQ:AMZN), not Facebook, Inc. (NASDAQ:FB), can lay claim to that title. And at slightly over $187, Apple stock just needs to push a little bit more to get there.
Needless to say, $1 trillion is a huge deal. First, the margin between Apple stock and its next-closest rivals is massive. Amazon, at $784 billion, occupies the runner-up position. Microsoft Corporation (NASDAQ:MSFT) lies in a tight third place at $748 billion, while Alphabet Inc (NASDAQ:GOOG,NASDAQ:GOOGL) is in a respectable fourth place at $755 billion.
The other factor to consider is that Apple Inc. will soon have a market value that exceeds many countries’ GDP. And I’m not talking about no-name countries here! Should Apple stock hit that trillion-dollar mark, it will exceed Netherlands’ GPD by nearly 6%. From there, Indonesia and Mexico are within realistic striking distance.
As our own Bret Kenwell articulates, AAPL stock could continue rising up the charts. Big whales, most notably Warren Buffett, are huge Apple Inc. fans.
Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) recently acquired 75 million shares, bringing its total ownership to approximately a 5% stake. While it’s not the end-all, be-all, Buffett’s presence certainly inspires confidence.
Not only that, the company’s valuation is insane. Kenwell writes that Apple stock “now trades at just under 16 times this year’s earnings and about 14 times next year’s estimates.” In comparison, Microsoft and Alphabet trade in the upper 20s. Amazon, for all its greatness, balloons at 253 times trailing earnings.
Apple Inc. can’t go wrong. Not to jinx it, but this is usually when things do.
Apple Stock Will Hit $1 Trillion, but Then What?
Before I get hit with a wave of angry emails, let me just make one thing clear: I’m not saying that Apple Inc. will fail to hit the buzzer. With such a small gap to cover, the consumer electronics giant can be a trillion-dollar firm before the weekend.
My question is, what will happen next?
The danger is that most investors may not know. It’s fun to watch Apple stock tick higher, with each basis point drawing the inevitable closer. But the buyers at this price should have some expectation in mind. Do they anticipate a $2 trillion company 30 years down the road? If so, what’s the rationale?
While AAPL stock has the most legitimate opportunity, this isn’t the first time people anticipated a trillion-dollar company. Back during the dot-com bubble, experts predicted Cisco Systems, Inc. (NASDAQ:CSCO) would bring home the goods. It got a little over the midway point before collapsing.
Investors learned right quick that a pound of anticipation isn’t worth an ounce of reality.
And what’s the reality for Apple stock? The competition has already closed in on the once untouchable company.
Many people know that Samsung Electronics dominates global smartphone market share.