Apple Leads 4 Companies With $1 Trillion Valuations

By Douglas A. McIntyre Published Jan 19, 9:24AM EST

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Apple Leads 4 Companies With $1 Trillion Valuations — © Daniel L. Lu (user:dllu) / Wikimedia Commons

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) has a valuation of $2.17 trillion and was the first company to pass the $1 trillion level on August 2, 2018. It topped the $2 trillion level on August 19 of last year. However, it has not always held the top spot on the market cap list. Microsoft Corp. (NASDAQ: MSFT) moved ahead of it on November 26, 2018. Apple took the lead back, and now the spread between it and the three other companies with market valuations above $1 trillion is substantial.

Apple’s road to a large advantage over Microsoft, the second most valuable company with a market cap of $1.61 trillion, has been paved largely by two things. The first is the new iPhone 12. It is expected to sell 200 million units this year. That will be driven by features like an improved camera. However, its real advantage is that it runs on new superfast 5G networks, which have become the gold standard of the wireless world.

The other leg of Apple’s rising value has been provided by its fast-growing services business. It breaks out the revenue of this as “Services” in its financial statements. Last year, Apple’s revenue barely rose from $260 billion the year before to $275 billion. Services revenue, on the other hand, rose from $46 billion to $54 billion. This was driven by sales from the Apple App Store, music, Apple Pay and the Apple TV line of services.

Microsoft’s position has its base in the rise of its cloud computing operations. Cloud computing has moved to the core of the technology business worldwide, and that has only improved, financially, during the pandemic. Microsoft ranks second on most lists of cloud computing market share. That success gets added to its ongoing strength in the operating systems for computers and servers, its relatively new hardware success and its games business.

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Next behind Microsoft, Amazon.com Inc. (NASDAQ: AMZN) has a market cap of $1.56 trillion. No other large American company has been helped as much by the spread of COVID-19. Consumers, shut-in and unable to go to traditional retailers, have flooded Amazon with orders for everything from toilet paper to consumer electronics to food. Amazon Prime’s video streaming business has also been lifted as people forced to stay home ravenously watch streaming video. Finally, Amazon holds the top spot in the cloud computing market, a segment critical to its overall top-line growth for several years.

Alphabet Inc. (NASDAQ: GOOGL) sits in fourth place among the $1 trillion public corporations at $1.17 trillion. The parent to Google, the world’s search advertising leader, and YouTube, it finds itself the most troubled of the four firms. Advertising, in general, was dented by the pandemic. It has come back somewhat, but the pandemic continues to threaten it. And the U.S. and EU governments have come to view its search business as a monopoly, which may pressure it to spin off one or more of its businesses.

It will take a large run-up for Tesla Inc. (NASDAQ: TSLA), the fifth company on the market cap list at $783 billion, to cross the $1 trillion barrier. However, its shares have risen 558% in the last year, so it would be a mistake to count it out.

Here’s what experts think the iPhone 13 will have as features.

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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.