I always find it interesting to watch how investors react to different Apple related news. Here is a company that, more often than not, posts record quarters with sky high revenues and profits that most firms only dream of, yet stock holders look for any sign to hit the panic button, sending shares down temporarily. And you know what? I predict it's getting ready to happen again as news spreads that Apple's market valuation is at an all-time high.
Apple ended the trading day yesterday at $122.02 per share, giving the company a $710.7 billion market valuation, the highest ever for a U.S. company. At the time of this writing, the stock is trading at $123.47 for a market cap of $719.07 billion, and it still hasn't hit the ceiling. According to Bloomberg, analysts on average have Apple's 12-month target at $132.56, with the highest target at $165, issued by First Shanghai Securities Ltd.
To put that into perspective, consider that Exxon Mobil Corp, the next biggest company in the world, has a market capitalization of $378.17 billion. And if you're wondering about rival Microsoft, the Redmond firm is sitting pretty at $347.92 billion. Those are impressive figures all around, just not as obscenely high as Apple's.
First and foremost, give a lot of credit to Apple CEO Tim Cook. I think he's proven by now that he's capable of running the company that co-founder Steve Jobs entrusted him with before passing away. Personally I think he needs to do a better job innovating -- new product releases don't have the same 'gee-whiz' factor that previous versions did -- but I can't argue with the results.
Second, what you're seeing is largely the result of the iPhone 6. Cook rolled the dice that Apple users were ready for bigger size displays that are on par with those found on high-end Android handsets, and he was right. The iPhone 6 and 6 Plus helped push overall iPhone sales to over 74.5 million units last quarter.
But the question remains; how high can Apple's market cap go? It depends on when the next panic moment occurs. Maybe the Apple Watch gets a lukewarm response, or perhaps a growth in sales doesn't live up to analysts' expectations by hair. As always, it's a roller coaster ride, and right now Apple is riding one heck of a high.