Apple now in rarefied air, company worth half a trillion dollars

Apple now in rarefied air, company worth half a trillion dollars
In the history of the stock market, only 5 U.S. corporations ever reached a market capitalization of half a trillion dollars. That is, until today. On Wednesday Apple's common stock hit a 52 week high of $547.61 and joined the list of those companies valued so richly. Of the five firms that previously hit the milestone, none are worth as much today. .

At the end of 2007, Exxon was worth half a trillion dollars at two different times, but is currently valued at $411 billion. At the end of 1999 and the beginning of 2000, Microsoft had passed the mark and even briefly topped $600 billion. Mister Softy, which is what traders call the company because of its stock symbol (MSFT), is now a $267 billion company. In early 2000, Cisco, Intel and GE each hit the $500 billion club in early 2000. Today, the trio are worth $100 billion, $100 billion, and $200 bilion respectively. Apple is currently sitting on a cash pile of $98 billion and as we recently told you, its value makes up 3.7% of the S&P 500 index

While most of the rise in value for the other companies was due to strength in a particular sector, like oil and gas for Exxon and technology for Cisco and Intel, Apple's rise is based on its strong growth in revenue and profits from a small number of extremely popular devices. To show how strong Apple has been growing, consider that despite its sky-high market cap, the stock is trading at only 15 times earnings. For comparison, another high priced tech stock, Google, trades at 21 times earnings. It is not unusual for an overvalued stock to trade at 50-75 times earnings or more. Some fundamental analysts argue that with a P/E of 15, Apple's current value is deserved and that it is a far way from being overvalued. 35 analysts following the stock have an average target of $592, which is 8% higher from current levels and implies a market cap of  $552 billion.

source: AP


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