Apple tops Microsoft to become most valuable company ever

Posted:
in AAPL Investors edited December 2014
Apple's continued strong market performance has made it the most valuable stock by market capitalization ever, besting a record set by Microsoft in 1999.

The company's market capitalization reached $621 billion in trading on Monday, besting the previous record held by rival Microsoft, as noted by the Associated Press. However, Apple's new achievement does not account for inflation. In today's dollars, Microsoft's 1999 record would have given it a market capitalization of $850 billion.

Last Friday, AAPL stock closed at a record price of $648, driven to new heights by rumors of a new iPhone, a smaller iPad, and an Apple television set.

Apple's tremendous success has helped to put it in a strong cash position which led the company to distribute its first dividend payment since the late 1990s to shareholder last week.

Apple's soaring market cap has made it worth more than 50 percent more than Exxon Mobil Corp, the second-largest company by market capitalization. Apple first passed Exon in August of 2011, with a then-value of $347 billion.

Market Cap


Earlier this year, Apple became worth more than Microsoft and Google combined when its market cap reached $456 billion. The iPhone maker saw its market capitalization pass Microsoft alone in May of 2010 when it reached $222 billion.
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Comments

  • Reply 1 of 78


    But… that one Chinese company…


     


    Anyway, when it falls back to $580 after the fall keynote, Apple will be doomed™ all over again, so it's all cool. image

  • Reply 2 of 78

    Quote:

    Originally Posted by Tallest Skil View Post

    ... Apple will be doomed™ all over again, so it's all cool. image


    image

  • Reply 3 of 78

    Quote:

    Originally Posted by AppleInsider View Post



    Apple's new achievement does not account for inflation. In today's dollars, Microsoft's 1999 record would have given it a market capitalization of $850 billion.


    That makes zero sense. Value is value. Inflation is in both the  numerator (cash flows) and denominator (cost of capital) in all valuation.

  • Reply 4 of 78
    Inflation sucks, but a notable paper milestone nonetheless!
    Steve Ballmer is going to need more chairs to throw.
  • Reply 5 of 78

    Quote:


    Inflation is in both the  numerator (cash flows) and denominator (cost of capital) in all valuation.



     


    Say what? Can you show me where "cash flows" and "cost of capital" factor into a market cap calculation? Funny. I thought it was "shares outstanding x price per share." Of course inflation makes a difference.


     


    If we experienced 100% inflation next year (and let's assume for the sake of argument that the economy didn't completely collapse and it didn't affect corporate health) are you telling me that apple's market cap wouldn't just be twice as big since the value of a dollar is now halved?

  • Reply 6 of 78

    Quote:

    Originally Posted by Tallest Skil View Post


    But… that one Chinese company…


     


    Anyway, when it falls back to $580 after the fall keynote, Apple will be doomed™ all over again, so it's all cool. image



    YES! There was a Chinese company in 1998(?) that hit 1 trillion dollars in their market cap, they quickly dropped down to zero and went bankrupted.

  • Reply 7 of 78

    Quote:

    Originally Posted by anantksundaram View Post


    That makes zero sense. Value is value. Inflation is in both the  numerator (cash flows) and denominator (cost of capital) in all valuation.



     


     


     


    Say what? Can you show me where "cash flows" and "cost of capital" factor into a market cap calculation? Funny. I thought it was "shares outstanding x price per share." Of course inflation makes a difference.


     


    If we experienced 100% inflation next year (and let's assume for the sake of argument that the economy didn't completely collapse and it didn't affect corporate health) are you telling me that apple's market cap wouldn't just be twice as big since the value of a dollar is now halved?

  • Reply 8 of 78


    I don't think AAPL is going south of $600 again for a long time, if ever… although the last "Adjustment" from $640 to $530 surprised me, I think it was a 'manipulated' fluke frankly… created by the "analysts" who made SO much of the "Big Miss" by the last quarterly report (never mind the repeat of record profits all over again)… This quick "Correction" past the mid $600's didn't surprise me at all, however… 


     


    $700 before Aug 31st…? VERY likely.


     


    And after the announcements in September? If it goes like people think, and we get a new iPhone, iPad "mini" and apple-TV (followed soon after by new iMacs and a 13" retina MacBook Pro?), it'll punch to $750...


     


    $1,000 after the holiday quarter ends… assuming the analysts don't drag it down too much by COMPLETELY overblowing the estimates…….


     


    And if an Apple TV Monitor comes into the mix? I don't know what the ceiling will be……………….

  • Reply 9 of 78

    Quote:

    Originally Posted by Suddenly Newton View Post



    Inflation sucks, but a notable paper milestone nonetheless!

    Steve Ballmer is going to need more chairs to throw.


     


    Let's start a Chip-In to get him a lifetime membership at Herman Miller.

  • Reply 10 of 78
    I think Apple's distinctive achievement is that they became the most valuable company by delivering the best, while Microsoft achieved theirs by catering to the lowest common denominator, and essentially trying to be all things to everyone.
  • Reply 11 of 78
    jragostajragosta Posts: 10,473member
    That makes zero sense. Value is value. Inflation is in both the  numerator (cash flows) and denominator (cost of capital) in all valuation.

    That's ridiculous.

    Value is what the market considers a company to be worth. If the value of the dollar drops (for example, with inflation), it takes more dollars to equal the worth of the company.

    You are referring to ESTIMATES of valuation, but even there, you're wrong.

    Let's look at the common proxies company value:
    - Earnings per share. This is the dollars earned divided by the number of outstanding shares. Since the number of outstanding shares is independent of inflation, inflation increases only the numerator and therefore increases the estimated value

    - Asset value. Asset value goes up with inflation.

    - Net asset value (assets minus liabilities). Both figures go up with inflation, but if the inflation for both assets and liabilities is the same and if the company had a positive net worth to start, then the difference will also increase with inflation.

    By almost any measure, an inflation adjustment is necessary to compare a present-day value to a historic value.
  • Reply 12 of 78


    Congratulations Apple!

  • Reply 13 of 78
    melgrossmelgross Posts: 33,299member
    But… that one Chinese company…

    Anyway, when it falls back to $580 after the fall keynote, Apple will be doomed™ all over again, so it's all cool. :lol:

    I don't believe it will drop back to $580, unless the world becomes overly worried about the problems in the EU at the same time.
  • Reply 14 of 78
    melgrossmelgross Posts: 33,299member
    That makes zero sense. Value is value. Inflation is in both the  numerator (cash flows) and denominator (cost of capital) in all valuation.

    Numbers are numbers. You can't make a valid comparison between numbers that have a lot of inflation between them, if comparing them in current dollars vs old dollars.
  • Reply 15 of 78
    melgrossmelgross Posts: 33,299member
    Let's start a Chip-In to get him a lifetime membership at Herman Miller.

    Best post so far!
  • Reply 16 of 78
    mactmact Posts: 26member


    in 1999, who would have ever guessed? 

  • Reply 17 of 78


    sigh...  as you track Asymco, it's becomes apparent the stock price directly tracks earnings with a little inertial sludge factor, so as P/E trends slightly downward.  So as Earning go up, stock price goes up.   The 'panic' that everyone basically had last month was all about 'expectations' which pushed Apple down under 14 in the P/E scale, and it should be around the 16 scale TTM.  It's now at 15.5, so figure going up to 675 until Sept 12th, then a sell on the news..., then trend up again until Oct 25ish (next Quarterly Earnings report).   If earnings go up as planned, then should go over 700, and in january, if they have the current analysts estimate... over 740.

  • Reply 18 of 78


    Originally Posted by MACT View Post

    in 1999, who would have ever guessed? 


     


    In 2003, who would have ever guessed!

  • Reply 19 of 78
    rptrpt Posts: 175member


    Obviously, as many here points out, any valid comparison of the market cap has to be made in inflation adjusted currency. However, it should be noted that while MS P/E at the top was around 35, Apples P/E is currently around 15, which indicates a sounder economy with better earnings.

  • Reply 20 of 78
    herbapouherbapou Posts: 2,227member

    Quote:

    Originally Posted by Tallest Skil View Post


    But… that one Chinese company…


     


    Anyway, when it falls back to $580 after the fall keynote, Apple will be doomed™ all over again, so it's all cool. image



     


    If Apple delivers on the rumor of an iphone 5 that start selling in september and an ipad mini I dont think there will be a sell off "on the news"  But if there is no ipad mini there will be a sell off. On the TV side, if we get something more than the usual Apple TV upgrade its more in favor of the upside. Hoping to finally get AppleTV apps this time. 


     


    The small wildcard will be the imac upgrades.  When do you guys think it will happen?

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