Apple Nears Number of the Beast with Record $665 Close

| Analysis

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.

AAPL Chart

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 AAPL Chart

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.

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10 Comments Leave Your Own

geoduck

Between 1995 and 2000 there’s a spot where it looks like the stock was worth less than zero. It was 12/share. That’s when my wife told me to buy $1200 worth of Apple stock.
I ignored her

She doesn’t bring it up….

...much

Bryan Chaffin

That’s funny, geoduck. smile

Lancashire-Witch

Hah! geoduck. When the price dropped below $100 following the demise of Lehmans in late 2008 my wife said I should buy 10 shares. I laughed.

Now I try to keep the price secret because I don’t care for hospital food.

Over $623 billion eh! That’s incredible.

Interestingly, Lehmans filed for bankruptcy holding about $639 billion of assets - but also $613 billion of debt!

Tiger

In after hours trading, the stock price climbed to $666.50. Thank you for that extra $.50!

MacFrogger

It really is amazing, isn’t it?  And all of this happened with the US economy in the doldrums and much of Europe in even worse shape…

Here’s one dreamy scenario that would drive the stock price much higher: iPhone 5 and iPad mini introduced on Sept 12, followed by Apple TV launch on Black Friday - just in time for the holiday shopping season!

On a unrelated note: Did anyone catch that MS/Nokia are rumored to announce their new phone on Sept 5?  Exactly one week before the likely iPhone launch, akin to how they tried to pre-empt the launch of Google’s Nexus 7 tablet with their announcement of their Surface vaporware.

MacHobbes

Sorry,
but such long term charts on a non-logarithmic scale are just utter nonsense. See Logarithmic charts ... which coincidentally appeared the same day.

MacHobbes

Sorry ... the correct link is
Logarithmic charts ...

Bryan Chaffin

I used a linear chart instead of a logarithmic chart specifically to illustrate just how much of Apple’s value has been accumulated in the last few years, rather than an attempt to follow the specific ups and downs during the 27 year period.

j03

The Wozniak number! Of course the number refers to the fact that the Apple I went on sale in July 1976 at a price of US$666.66 because Wozniak “liked repeating digits”. They would have died had they known this would be the future price for one share of Apple!

wab95

Bryan:

Just a couple of comments about that oft-cited statistic. It seems that every pundit and their uncle kept repeating that, although Apple’s market cap exceeded the record set my MS, it really didn’t achieve it - so there. One newscaster almost made it sound as if Apple were cheating, or ‘yet again’ infringing with an ill-gotten gain.

First, one could play that game ad infinitum; did MS actually beat the prior record holder if one adjusted for inflation for the year in which the previous record was set, etc, etc? Why does Apple have to meet stricter record-setting criteria than others? Do we always adjust for inflation when discussing market cap? Not that I recall. Heaven forbid that Apple, the ever-beseiged, star-crossed, death knell magnet that it is, should garner some indicator of success without someone setting the record straight and showing Apple its proper and lesser place.

Second, MS did this during a dot-net boom; and benefitted from the tech momentum of needed PC sales to enable to bubble. In other words, there were external effect modifiers that assisted MS’s marked growth. Apple, on the other hand, accomplished this feat during a global economic downturn that defied the trajectory of the entire tech industry. Its competitors are seeing a decline of growth rates or even, in some cases, a contraction of growth. Indeed, the majority of its competitors (Google, for one, is an exception) have seen a decline in their market cap over the same interval of Apple’s steep incline. That makes Apple’s ascension to this milestone all the more remarkable; it had to accomplish this on its own - no aid from OEMs or other effect modifiers in the market, thank you very much.

That second point, alone, in my view, trumps adjustment for inflation, and justifies Apple’s moment in the sun without qualification or equivocation.

Here endeth my rant.

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