Apple could more than double its market capitalization in less than five months in a pandemic COVID-19. The company survived, despite the problems of supply from China and the closure of stores around the world. Analysts predict Apple’s future growth and achieving $3 trillion. 2023.
Apple (NASDAQ: AAPL) in the headlines of news publications on the background to achieve a market capitalization of $2 trillion. during the session on Wednesday, but the closing has reduced the total market valuation to $1.98 trillion. Growth of Apple shares since the beginning of the year was 57.6%, and for the last 12 months the price increased by 120%.
Today, Apple and Microsoft (MSFT) together cost nearly $3.6 trillion. The club of companies worth more than $1 trillion. also includes: the world’s oil giant Saudi Aramco ($1,23 trillion) Amazon (AMZN) and parent company Google Google (GOOG, GOOGL).
A landmark event for Apple, the recent large purchases of its shares by Warren Buffett, one of the most famous billionaires and investors in the world. The legendary CEO of investment company Berkshire Hathaway (NYSE: BRK.A, BRK.B) owns more than 250 million or more than 5% of the issued shares of Apple. The value of Buffett’s investment in Apple in recent years has grown to more than $115 billion, which is more than 45% of the investment portfolio of Berkshire Hathaway.
Buffett does not intend to rest on our laurels, saying: “We bought about 5% of the company, I would like to own 100% of its shares”.
At the same time, Apple’s stock will soon become more affordable for small investors, as the company announced the procedure of crushing (split) of shares in the ratio of 4 to 1. This means that the total number of shares outstanding will increase by 4 times, the price is reduced from the current $460 to about $115. Trades at the new prices will begin on August 31.
The strong financial results of Apple in spite of the negative macroeconomic and other factors, and high dividends attract shareholders around the world.
Apple has announced that it will increase dividends by 6%, which was the eighth such increase in many years. After the resumption of payments in 2012 dividends Apple increased by 116%, bringing the quarterly payout was $0,82 per share. Currently, its yield is about 0.71%, although the strong growth stocks in recent years has affected the profitability. Apple continues to receive high profits, and the company uses only 24% of their income to support the payments, so that annual growth is likely to continue for a long time.
The growth of Apple despite the circumstances
Apple, headed by Gen. Director Tim cook has proven the ability to achieve strong results despite the adverse circumstances.
July 30, Apple reported financial growth for the 3rd quarter, which exceeded average forecasts in the market, despite the conditions of the pandemic COVID-19 and closing stores around the world.
Prior to this, the company faced problems in the supply with China and need for diversification due to the strong dependence on supply from this country. Most of Apple suppliers are still in China.
In a “trade war” with China Tim cook was able to dissuade the US President Donald trump from imposing high duties on key products such as the iPhone and AirPods.
In this case, Apple is in some of its working practices are being investigated by the US authorities and the EU. In the article “the Leaders of Amazon, Apple, Facebook and Google testified before Congress on charges of anti-competitive wrestling” Marketinfo.pro wrote that the main charges impact fees to the company for the deployment of applications in the App store.
Third-party developers accuse the company of inconsistency and not equal rights for all. Epic Games, Creator of popular gaming app Fortnite, Apple filed for a lawsuit.
The prospects of the Apple – when will there be a new milestone of $3 trillion.?
Commenting on the July report, Apple confirmed long-standing rumors that the release of the new iPhone with the 5G technology will come several weeks later than Sep. Some experts link the delay to the fact that the company produces its own chips for the next generation iPhone.
All the analysts raised their ratings and price targets for Apple in recent months, referring to great expectations of this launch, pointing out that a huge audience of Apple device owners waiting for an update.
According to one of the most optimistic analysts, Dan Ives from Wedbush: “Apple has an opportunity that happens once in a decade within the next 12-18 months, because, according to our estimates, approximately 350 million of the 950 million iPhone around the world can potentially be updated”.
In addition, analysts approve of the Apple strategy is aimed at the development of the services segment, waiting for the official announcement package offers “Apple One”.
Ives evaluates service business Apple in the amount of from $700 to $750 billion, predicting that by 2023, Apple’s market capitalization will grow to $3 trillion.
Working on new versions of existing products and services, Apple is also developing a few devices, virtual and augmented reality and works in the healthcare industry.