Daily Management Review

Apple's market cap approaches parity with Chinese banks


The market value of Apple is close to total capitalization of the five largest Chinese banks - China Construction Bank, Agricultural Bank of China Ltd., Industrial and Commercial Bank of China Ltd., Bank of Communications and the oldest Chinese bank, Bank of China Ltd. Each of them is listed among the world's largest banks, reports Bloomberg.

Earlier this month, capitalization of the Cupertino high-tech giant has exceeded the $ 800 billion mark, and now there are just 2% preventing Apple company from achieving the level of total capitalization of financial companies in the world's second-largest economy.

Apple shares are growing due to expectations that the next iPhone, which is scheduled for release this year, will help the company to increase sales again. During the auction, Apple’s share price reached $ 153.44, and there are 5.214 billion shares in circulation. On May 8, at the close of trading on the NASDAQ exchange, the price of one Apple share was $ 153.01 per share, the company's papers completed 2.7% growth. For comparison: capitalization of Alphabet (the parent company of Google) on May 9 was $ 652 billion, Microsoft - $ 533.72 billion, Amazon - almost $ 452 billion, Berkshire Hathaway - $ 407 billion.

Since the beginning of the year, the corporation's shares have risen in price by a third and by $ 300 billion - over the past 12 months. Against the background of the general rise of the market, papers of other technology companies - Amazon, Facebook, Google - have grown by 20-30% since the beginning of the year. Apple’s market cap exceeded $ 700 billion a little more than two years ago.

If Apple’s value continues to grow at the same pace, its capitalization will pass the milestone of $ 1 trillion before the end of the year, says Reuters. Since early 2017, the company has risen in price by 33%, since the November presidential election - by almost 50%. Apple accounts for almost 4% of the S&P 500 index, the total capitalization of which is $ 21.7 trillion. In April, MarketWatch, citing analysts at RBC Capital Markets, said that Apple's market capitalization in 2017 could grow to $ 824 billion.

Brian White, an analyst of Drexel Hamilton, believes that Apple’s shares can rise in price to $ 202 per share for 12 months. If his forecast comes true, then the smartphone manufacturer’s capitalization will exceed $ 1 trillion, notes Bloomberg.

"The situation reflects how powerful the company is", said Richard Meckler, president of LibertyView Capital Management, to the agency. "Apple has a limited set of products, yet it keeps holding the market leadership, and is able to maintain margins despite many competitors ".

Apple's net profit in the second quarter increased by 4.9% to $ 11.03 billion. Net revenue increased by 4.6% to $ 52.9 billion, but iPhone sales decreased by 0.84% from 51.19 million units to 50, 76 pieces. The company's revenue for the quarter was $ 52.9 billion, or $ 2.10 per share. For comparison, the company's revenue for the same quarter of the previous year was $ 50.6 billion, or $ 1.90 per share. International sales accounted for 65% of quarterly revenue.

source: bloomberg.com, foxbusiness.com

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