APPLE’s market value climbed past $623bn on Monday, surpassing the record set by Microsoft during the heyday of technology stocks in 1999.
Apple shares rose 2.6%, bringing its gains this month to almost 9% as Wall Street bets on the September 12 roll-out of the latest and larger version of the iPhone. Microsoft, however, retains the title of history’s most valuable company if its 1999 peak value of about $621bn is adjusted for inflation.
Apple’s stock usually rallies in the run-up to major product launches, among the most heavily watched events on the annual tech calendar. The iPhone is the company’s biggest product, yielding half or more of its sales.
Some analysts also think it intends to announce a smaller iPad to safeguard its market share, as rivals from Google to Amazon begin selling cheaper, seven-inch tablets. But Bernstein Research’s Toni Sacconaghi warned that questions remain about the availability of components for both the iPhone and the iPad, which has constrained Apple’s product shipments in the past.
"A key question for the launch will be Apple’s expected roll-out schedule," the analyst wrote on Monday. "Apple’s intention is to continue to ramp offerings as quickly as possible, but the company’s ability to do so remains a key near-term question."
Apple’s shares have risen 64% this year. On Monday, they closed at a session high of $665.15, conferring on the Silicon Valley giant a capitalisation of $623.5bn, exceeding Microsoft’s 1999 value. But Microsoft’s value would rise to $853.7bn after adjusting for rising prices, according to the Bureau of Labour Statistics’ inflation calculator.
Apple overtook Exxon Mobil to reach the number one spot by market capitalisation last year. Monday’s move means it has now entered the record books as the biggest company ever, in terms of market value.
"Everyone loves a winner; if you play the quick trade, be careful," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, in e-mailed comments. "If you are an investor, check the fundamentals and business plans, and avoid the hype in your decision."
Apple climbed even as fellow technology heavyweight Facebook plumbed new depths. The leading social network slid to a record intraday low of $18.75 in the morning before bouncing back to close just above $20 after Capstone upgraded the company’s stock to buy from hold.
Facebook’s stock has gone south in the past month as investors worried about its ability to make revenue grow. Last week, some early investors were given the go-ahead to sell for the first time since Facebook’s May 18 listing. Several similar lock-ups will expire this year.
Facebook rebounded above $20 in afternoon trade after Capstone’s upgrade, based on a combination of a more attractive valuation since its decline and good long-term advertising prospects.
"It seems to be down around levels that people who didn’t like the deal thought it was really worth. And now it seems to have stabilised," sad Eric Kuby, chief investment officer at North Star Investment Management in Chicago. It may have "found a level which seems more of a better price for people valuing the company in terms of the future".
Reuters
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