Apple’s $1 trillion chase isn’t so unprecedented after all — in fact, it’s completely logical


Apple, at almost US$950 billion, is closer than any U.S. company has come to the US$1-trillion milestone.Gabrielle Lurie/AFP

Mind-boggling. Unprecedented. And here’s another way of describing Apple Inc.’s ascent toward US$1 trillion: totally logical.

Not to take anything away from Apple, which at almost US$950 billion is closer than any U.S. company has come to the milestone. But in a world where US$20 trillion has been added to the value of American equities in a decade, what would really be astonishing is if nobody were knocking at the 13-digit door.

Maybe the existence of three other megacaps worth more than US$700 billion doesn’t convince you. Or that relative to earnings, Apple trades at a third of what Microsoft fetched in 2000. How about another test — whether Apple is really so freakishly large compared with everything else?

Right now, the iPhone maker is 4.2 per cent of the S&P 500. That’s a lot, but nowhere near a record. In fact, its weighting is only slightly larger than the average for the market’s biggest company since 1980.

It’s not a case against Apple exceptionalism. It’s an observation that the stock market has evolved into a place where trillion-dollar companies are just a lot more likely to exist.


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