Apple Surges Past $3 Trillion Market Cap

By Douglas A. McIntyre Published Dec 6, 9:55AM EST

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Apple Surges Past $3 Trillion Market Cap — © Stephanie Keith / Getty Images

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) has hit an unimaginable milestone. Its market cap is $3 trillion, well ahead of Microsoft’s $2.7 trillion. It is also just shy of California’s gross domestic product. The company struggled to hit the milestone, but belief in the power of its brand helped it along. (See which 25 huge companies Apple could buy right now with cash.)

Apple’s shares barely beat the improvement in the S&P 500 a year ago. Today, its shares are up 48% year to date compared to the market’s rise of 18%. Concern about iPhone sales and earnings halted its run-up two months ago. It started another rapid climb to a share price near $193.

What Apple Has Done

Apple’s improvement is based on the fact that Wall Street has decided to trade Apple’s earnings problems for much better numbers in the future. The bet has risks. iPhone sales did start to slow with the iPhone 15. They barely budged last quarter, from $42.6 billion a year ago to $48.3 billion.

Optimism about Apple is based largely on its services business, which has grown rapidly for four years and continues to do so. In the most recent quarter, revenue for the unit reached $22.3 billion, up from $19.2 billion last year.

The services business takes advantage of what is known as its “walled garden.” Apple has over a billion hardware devices used by people around the world. This, in turn, gives it a platform to sell videos, songs, cloud storage systems and more. To access most of these, consumers must own at least one Apple device.

Apple has begun a rotation from hardware sales to software and services. While iPhone, Mac and wearable sales will still represent the major part of Apple’s revenue, they have become a platform for new revenue going forward.

What Apple has done, it has done before. It has reinvented itself and has already started to benefit from that reinvention.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.