Apple hits $2 trillion in market valuation, punctuating Big Tech's grip

Becomes first US firm to reach the milestone

It took Apple 42 years to reach $1 trillion in value. It took it just two more years to get to $2 trillion.

Even more stunning: All of Apple’s second $1 trillion came in the past 21 weeks, while the global economy shrank faster than ever before in the coronavirus pandemic. On Wednesday Apple became the first US company to hit a $2-trillion valuation when its shares climbed 1.2 percent to $467.78 in morning trading. It was another milestone for the maker of iPhones, Mac computers and Apple Watches, cementing its title as the world’s most valuable public company and punctuating how the pandemic has been a bonanza for the tech giants.

As recently as mid-March, Apple’s value was under $1 trillion after the stock market plunged over fears of the coronavirus. On March 23, the stock market’s nadir this year, the Federal Reserve announced aggressive new measures to calm investors. Since then, the stock market — and particularly the stocks of Apple, Microsoft, Amazon, Alphabet and Facebook — largely soared, with the S&P 500 hitting a new high on Tuesday.

 

Investors have poured billions of dollars into the tech behemoths, betting that their immense size and power would serve as refuges from the pandemic-induced recession. Together, those five companies’ value has swelled by almost $3 trillion since March 23, nearly the same growth as the S&P 500’s next 50 most valuable companies combined, including Berkshire Hathaway, Walmart and Disney, according to S&P Global, the market analytics firm. Apple’s valuation alone rose by $6.8 billion a day, more than the value of American Airlines.

“It’s become the new flight to safety,” Aswath Damodaran, a New York University finance professor who studies the stock market, said of investors flocking to Big Tech. Companies that are rich, flexible and digital are benefiting in the pandemic — and that describes the tech Goliaths, he said, adding, “This crisis has strengthened what was already a strong hand.” Apple’s rapid rise to $2 trillion is particularly astonishing because the company has not done much new in the past two years. It has simply built one of the tech industry’s most effective moneymakers, which has such a firm grip over how people communicate, entertain themselves and shop that it no longer relies on groundbreaking inventions to keep the business humming.

© New York Times News Service 2020