Apple becomes the most valuable company in the world... ever

Apple is the world’s most valuable company, ever.

Yesterday, its surging stock propelled the company’s value to $623bn (€504bn), beating the record for market capitalisation set by Microsoft in the heady days of the internet boom.

After a four-month dip, Apple’s stock has hit new highs recently because of optimism around what is believed to be the impending launch of the iPhone 5, and possibly a smaller, cheaper iPad.

Apple has been the world’s most valuable company since the end of last year. It’s now worth 53% more than No 2 Exxon Mobil.

Apple’s stock hit $664.74 in midday trading before retreating slightly to $661.70. That was $13.42, or 2.1% higher than Friday’s close.

Microsoft’s 1999 peak was $620.58bn, according to Standard & Poor’s.

The comparison does not take inflation into account. In inflation-adjusted dollars, the software giant was worth about $850bn on Dec 30, 1999. Microsoft is now worth $257bn.

Analysts believe Apple’s stock has room to grow. The average price target of 38 analysts polled by FactSet is $745.80.

Despite the surge, Apple’s stock is not particularly expensive compared to its earnings for the last 12 months. The company’s price-to-earnings ratio is 15.6, compared to 16.1 for the S&P 500 overall.

That suggests investors, unlike analysts, don’t believe the company can grow its sales much from current levels.

Apart from the iPhone and “mini iPad,” analysts are speculating that Apple plans to make a television set to complete its suite of consumer electronics products. Apple usually does not comment on its future product plans until a few weeks or days before a launch.

Apple’s stock surge has made it a major part of many investment portfolios, often without the investors realising it. The company makes up 4.7% of the value of the S&P 500 index, which is used as the basis for many mutual funds.

Figures supplied by FactSet imply Microsoft’s market capitalisation record was $619.25bn, somewhat lower than the $620.58bn calculated by S&P.

The difference lies in the number of outstanding shares the firms ascribe to Microsoft at the time.

China’s largest oil firm PetroChina, could lay claim to having hit a market capitalisation even higher than Apple’s, because of the particularities of the Chinese stock market.

It was briefly worth $1,000bn after it listed on the Shanghai stock exchange in 2007, but only based on its price on that exchange, which is isolated from the rest of the financial world because of Chinese laws on foreign investment.


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