Apple Inc. achieved a remarkable milestone on Friday, as its market value surpassed the $3 trillion mark for the first time since January last year. This development is seen as a positive indicator of improving inflation and bodes well for the company’s expansion into new markets.
The shares of Apple, renowned as the world’s most valuable company, experienced a significant 1.8% surge, reaching an all-time high of $193.03. According to data from Refinitiv, this propelled the company’s overall market capitalization to $3.035 trillion.
This marks the fourth consecutive record high for Apple’s stock, underscoring its impressive performance. While back on January 3, 2022, the company briefly exceeded the $3 trillion mark during intraday trading but closed just below that level.
On Friday, other prominent growth stocks like Nvidia Corp and Tesla Inc also witnessed notable gains following a report by the Commerce Department. The report revealed that the personal consumption expenditure price index for May was higher than April but displayed slower growth—a sign of progress in the Federal Reserve’s efforts to combat inflation.
Apple’s stock has displayed remarkable growth in 2023 thus far with a staggering increase of 48%. This surge in value aligns with optimistic sentiment on Wall Street driven by expectations that the Federal Reserve is nearing completion of its interest rate hike campaign. Additionally, there is growing optimism surrounding Apple’s future prospects due to advancements in artificial intelligence.
Despite Apple’s recent quarterly report indicating a decline in revenue and profit, it outperformed analysts’ expectations. The company has solidified its reputation as a safe investment during times of global economic uncertainty through consistent stock buybacks.
Art Hogan, chief market strategist at B. Riley Wealth, lauded Apple as one of the premier publicly traded companies due to its consistent growth, diversified revenue streams, shareholder-friendly management approach including share buybacks and dividend payments, strong financial position and robust cash flow.
Apple’s attainment of the $3 trillion milestone comes shortly after the release of its costly augmented-reality headset on June 5. This move represents a bold step for the company, reminiscent of the risk taken when introducing the iPhone over a decade ago.
Since the launch of the headset, Apple’s stock has risen over 6%, surpassing the 4% gain of the broader S&P 500 index.
Moreover, Apple’s recent stock rally has exceeded analysts’ projections for its future earnings. Presently, the stock is trading at 29 times projected earnings, its highest valuation since January 2022. In comparison, data from Refinitiv reveals that the average price-to-earnings (PE) ratio for the S&P 500 Technology Index stands at approximately 13.