The first trillion is the hardest.
Apple, after two solid quarters beating Wall Street estimates, has now hit an unprecedented milestone: It’s the first U.S. company with a market cap of $2 trillion. The largely symbolic mark comes just over two years after Apple was the first American corporation to reach a market cap of $1 trillion.
Apple’s share price has climbed more than 55% year to date, and have more than doubled since the pandemic-induced March 23 low, as sales of iPhones and in its services segment have not only weathered the COVID crisis but have seen healthy year-over-year gains.
[UPDATE: After rising in morning trading, Apple stock declined later in the day Wednesday to close at $462.83 per share — giving it a market cap of $1.979 trillion.]
For the June 2020 quarter, the tech giant reported revenue of $59.7 billion, an increase of 11% from the $53.8 billion in revenue in the prior-year period. The company’s earnings per share of $2.58 was also an improvement on the $2.18 per share that Apple earned in the same period in 2019. Analysts had expected Apple to deliver revenue of $52.3 billion and earnings of $2.07 per share.
“In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation,” Apple CEO Tim Cook said in announcing the quarterly results last month.
Apple is aiming to build on its growth in services with a new bundling strategy, according to a report last week by Bloomberg. The Cupertino, Calif.-based company is prepping a series of new discounted services bundles, with Apple TV Plus and Apple Music in the baseline tier. Those could launch as soon as October along with new iPhones and the launch of iOS 14, per the report.
“With a strong broad portfolio of devices and a growing services offering, there are plentiful opportunities for [Apple’s] future growth,” PP Foresight analyst Paolo Pescatore said. “All eyes are now on the eagerly anticipated 5G iPhone which will fuel further consumer demand.”
Apple had previously expected to deliver its new 5G-enabled iPhone 12 in September, but the company last month confirmed it will ship a few weeks later than it planned.
As Apple’s market power has increased, it has become a bigger target for critics accusing it of engaging in anticompetitive behavior.
Cook was among the tech-company CEOs called to testify before the House Antitrust Subcommittee‘s July 29 hearing, where he was grilled about Apple’s App Store practices. He claimed that “we treat every developer the same,” but documents from the congressional investigation revealed a special deal with Amazon under which Apple would take a 15% revenue cut of Prime Video in-app sales (versus the standard 30%) in return for Amazon agreeing to sell Apple products.
Last week Epic Games, maker of the popular battle-royale game “Fortnite,” sued Apple alleging it was imposing “unlawful” restrictions to monopolize its app platform (and also sued Google on the same grounds). That came after Epic announced it was bypassing Apple App Store and Google Play’s 30% in-app payment commission rules by giving “Fortnite” users a 20% price break if they purchased in-app game currency directly, whereupon Apple and Google removed “Fortnite” from their stores.
Meanwhile, the European Union launched an antitrust probe into Apple in June after a complaint last year filed by Spotify over App Store rules. In addition, Apple is among the Big Tech companies targeted by various U.S. government antitrust investigations, including by the Justice Department, FTC and state attorneys general.
Other than Apple, only one other publicly held company has hit the $2 trillion market-cap mark: Saudi Aramco, the oil and gas company owned by the government of Saudi Arabia, whose market capitalization topped $2 trillion one day after its IPO in December 2019 but has since dropped in value.