Amidst a flurry of overnight trading and the recent WWDC announcements, Apple has once again achieved a remarkable milestone, reaching a market capitalization of over $3 trillion. As the NASDAQ prepares to open, Apple’s pre-market trading touched $190.73, reaffirming its status as the world’s most valuable company.
In January 2022, Apple became the first company to attain a $3 trillion valuation, only to experience a decline in its market value to under $2 trillion over the following year due to investor concerns. This downward trend coincided with significant supply chain disruptions that affected Apple’s flagship products. Notably, the iPhone 14 Pro faced substantial production delays caused by COVID-related issues in China, impacting its sales during the peak iPhone season.
However, since the end of 2022, Apple has successfully addressed these challenges by normalizing its production and diversifying its manufacturing operations. With an increased focus on countries like India, Apple aims to reduce its reliance on China for iPhone production.
Despite a decreasing number of shares in circulation, Apple has consistently implemented stock buybacks, retiring a significant portion of its own stock. This strategic move helps reduce the total number of available shares in the market.
Furthermore, Apple is about to enter its most profitable period of the year. The highly anticipated iPhone 15 is slated for release in the fall, alongside a host of other products expected by the end of 2024.
According to Wedbush analysts, Apple’s forward-thinking strategy and robust services revenue are key drivers behind its valuation growth. They predict that Apple’s annual services revenue will approach $100 billion by FY24, reflecting an impressive double-digit growth trajectory. As a result, Wedbush believes Apple’s fair valuation could potentially reach the $3.5 trillion range, with a bullish estimate of $4 trillion by FY25.
An important factor in Wedbush’s growth prediction is the belief that the new Apple Vision Pro and its accompanying App Store will further expand Apple’s market dominance. This expanded ecosystem is anticipated to strengthen Apple’s position and create new revenue streams.
While the sustainability of Apple’s $3 trillion valuation remains uncertain in the face of market forces, the figure itself may hold little tangible meaning for users who do not hold Apple stock. Nonetheless, Apple’s consistent innovation, strategic vision, and solid financial performance continue to reinforce its position as a global industry leader.