Apple's Stock Sets Record Closing High, Market Cap Record Still Waits

Shares of Apple Inc. set an all-time closing high on Tuesday, ending the day at $100.53 per share, a gain of $1.37 (+1.38 percent), on heavy volume of 69.4 million shares trading hands. The previous closing record was $100.30 per share, set on September 19th, 2012.

$AAPL Chart for Tuesday, August 19th, 2014

$AAPL Chart for Tuesday, August 19th, 2014
Source Yahoo! Finance (annotation by TMO)

It's a stellar day for $AAPL shareholders, CEO Tim Cook and his newly expanded leadership team, and the company's board of directors, but there are still a couple of records left to set. The first is the intraday high, which is $100.72 per share, hit on September 21st, 2012, just before the stock took a nosedive on concerns about Apple Maps (and what that theoretically said about Apple).

An even bigger record for Apple's stock lies in its market capitalization (market cap), or the total value of a company based on the number of shares outstanding times the share price. While Apple's stock price is safely in record territory, Apple's market cap is still many billions of dollars off its all-time high, and that's not including inflation.

This is because of Apple's (record-setting) share repurchase program, where the company has taken billions of dollars in profits and bought back tens of millions of shares. At the time of Apple's all-time closing high in 2012, the company had some 948 million shares outstanding, or 6.64 billion shares on a split-adjusted basis. That made Apple's incredible market cap approximately 666 billion*.

That was—and is—a record in absolute dollar terms, surpassing Microsoft's 1999 pre-bubble valuation of $613.3 billion. When you throw inflation in, however, Microsoft still holds the record. That $613.3 billion in 1999 dollars is worth between $818 billion and $1 trillion in 2013 dollars.

Back to that share repurchase program: Apple has some 6 billion shares outstanding as of Tuesday, well south of the 6.64 billion it had in 2012. That puts Apple's market cap on Tuesday, August 19th, 2014, at $602 billion, also well south of the $666 billion Apple hit in 2012.

This isn't a bad thing—quite the opposite. Apple bought back all those shares in the first place to lift share price. That Apple hit a closing high on Tuesday is due in part to the fact that it bought back tens of millions of shares. It would not have had a new record otherwise, and we wouldn't be talking about this.

But it does mean that we, as Apple investors and fans of the company's products, have a couple of more records to look forward to. With the number of shares outstanding as of Tuesday, Apple needs to hit roughly $110.98 per share before the old absolute record market cap is surpassed. After that, we can look forward to the seemingly insane possibility of a trillion dollar valuation to knock Big Redmond off its relative perch.

*\m/ \m/ (Also, it was just below that mark, but rounding is as rounding does).

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.