Apple tops US$600 billion in market value

John Cox
12 April, 2012
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Apple’s stock price surged over the US$600 mark on Wednesday, about a month after shooting past US$500. For a time, the company’s total market capitalization was more than US$600 billion. The stock price rose to US$644 and then fell back to US$629 by midday. Only one other company has reached the US$600 billion value: Microsoft on Dec. 30, 1999, was valued at US$619 billion. Today, its value is US$260 billion, according to an Associated Press story.

It’s all the more noticeable because stocks on the main exchanges fell yet again in response to poor U.S. job numbers last week and continued concerns over the European debt crisis.

Apple’s stock price has climbed 59 percent this year. A range of analysts have said the stock has been under-valued by the market, despite the company’s high revenues and huge profits created by the introduction of its iOS-based mobile products.

The question is how high will the stock price and the company’s value, go? Last week, a stock analyst with Topeka Capital Markets, Brian White, attracted headlines by setting a target price of over US$800 per share and a goal of US$1,001, which would bring Apple close to being a US$1 trillion company. White argued that the start of iPhone sales on China’s biggest mobile carrier, China Mobile and the launch of an Apple TV set, would expand Apple’s revenues and profits.

Piper Jaffray analyst Gene Munster also raised his price target for Apple’s stock, but not as high as White: Munster’s target lifted to US$718 from US$670 and others expect the price to at least top US$700. Munster was quoted as saying his previous forecast underestimated Apple’s “expected growth rates for the smartphone and tablet markets.”

Some have speculated that the stock price surge was triggered by Apple’s recent announcement that it will use some of its nearly $100 billion in cash to pay a dividend and buy back some shares. But Dirk Schmidt, writing at the Asymco blog, cites data that show the price began ticking upward faster in late 2011 and then even faster starting in February 2012, well before the mid-March dividend news.

According to one account, today’s first intra-day trade over US$600 came 22 trading days after the first US$500 trade. That pace is faster than the 32 trading days needed to rise from US$400 to US$500.

 

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