Throw some goats and put on your best numerology cap: Apple hit a new all-time high on Monday when it closed at US$665.15, a gain of $17.04 (+2.63 percent), on heavy volume of 21.9 million shares trading hands. The record close also means that Apple now owns the record for the most valuable company of all time with a market capitalization (market cap) of $623.5 billion.
Five Day Chart for AAPL
Source: Yahoo! Finance
Fun With Numbers
Absurd 666 references aside, let’s look at the record market cap. In December of 1999, on the eve of the tech bubble busting, Microsoft set the record for the world’s most valuable corporation by having a net worth of $613.3 billion, a record that stood for more than 12 years. With today’s close, Apple is worth more than its erstwhile foe.
That, however, ignores inflation. If one accounts for inflation, Microsoft still holds the record. Using this handy-dandy relative value inflation calculator, Microsoft’s $613.3 billion value is worth approximately $828 billion today, well actually in 2011. Inflation calculators for 2012 won’t be available until some time in 2013.
For Apple to be worth $828 billion (!!!), the company’s stock would have to be sell for $883.29 per share (with 937.4 million shares outstanding). That’s a 32.8 percent premium over today’s closing price of $665.15, which means Apple has a long way to go to truly be able to beat Mr. Softy’s record market cap.
And that’s ignoring the further inflationary effect on these relative prices.
The Story This Year
That said, Apple has gained a staggering $260.15 per share in calendar 2012 so far. That’s a staggering 62.3 percent since the stock closed at $405 on December 30, 2011. If AAPL were to continue its tear—which we are most specifically not saying it necessarily will—it could conceivably hit that number before the year is out.
But can Apple’s stock rise so high? Much of the gains that have edged the stock higher in the last two weeks is all about the rumors surrounding the iPhone 5, an iPad mini, and more recently, new Apple TV rumors. The company will supposedly be introducing some or all three of these devices during a September 12th media event, and investors want in on the action ahead of time.
The markets could also be showing a favorable interpretation of Apple’s epic patent battle with Samsung, but whatever the fundamental cause of Apple’s current gains, the company’s stock history shows that while the general trend is up, it includes all manner of rises and dips to get there.
There’s also the fundamental question of how much Apple could legitimately be worth, and whether or not we’re nearing the reasonable high end of that value. How many iDevices can Apple sell?
According to the market, we don’t know the answer to that question just yet, but will it continue to feel that way at $666 billion? At $750 billion? At $883 billion?
Only time will tell, but in the meanwhile, we’ll take a little my-how-times-have-changed pleasure in Apple taking the absolute-dollar market cap throne from Microsoft.
We’ll close with a look at Monday’s closing market caps for some of Apple’s competitors:
Dell: $22.1 billion
Microsoft: $257.7 billion
Intel: $131.2 billion
HP: $39.6 billion
Samsung: $166.4 billion (on South Korea Stock Exchange)
The world’s second most valuable company, Exxon Mobil: $406 billion
For some perspective, here’s a 27 year look at Apple’s stock performance:
27 Year Chart for AAPL
Source: Yahoo! Finance
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.