Apple Gains Nearly $200 Billion in Market Value in 2014

To put Apple Inc.’s (NASDAQ: AAPL) growth in perspective, among the 20 largest companies in market cap, Apple’s gain is bigger than the total of Berkshire Hathaway Inc.’s (NYSE: BRK-B) at $185 billion, Coca-Cola Co.’s (NYSE: KO) at $186 billion or Verizon Communications Inc.’s (NYSE: VZ) at $186 billion.

At the core of the rise is Apple’s iPhone 6 and iPhone 6 Plus, which were launched September 19. Much of Apple’s stock increase began when the company announced initial results. iPhone 6 sales in the first three days after its release totaled 10 million, above many analyst estimates. When Apple posted its earnings on October 20, the company said earnings per share (EPS) grew 20% over the same period in the previous year to $1.18. iPhone sales accounted for 55% of Apple’s $42 billion in revenue, with 39 million of the smartphones shipped.

Dial back to the quarter Apple announced on April 23. EPS rose 15%. Revenue rose only 5%. On a sequential quarter basis, Apple’s iPhone sales dropped from 51 million in the first quarter of 2014 to 43 million. The iPhone 5 was getting old. The rumored launch date of the iPhone 6 had moved toward the end of 2014, according to many analysts. There was a deep concern that Apple’s new smartphone could not compete with the newest Samsung Galaxy line of products. Samsung’s global market share in smartphones shipped had risen through most of 2013.

The latest forecasts of Apple’s success are enthusiastic. According to Barron’s, Morgan Stanley recently puts its forecast for iPhone shipments at 67 million for the current quarter and set a price target for Apple’s shares at $126, up from the current price of $113. A rise of that magnitude would put Apple’s market cap at three-quarters of a trillion dollars. Carl Icahn, a major Apple shareholder, expects the number to reach $1 trillion. Some of the rise Icahn expects would be driven by stock buybacks.

At $1 trillion in market cap, Apple’s share price would be double what it was at the start of 2014.

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