How much is Apple’s $1 trillion? - August 08, 2018

How much is Apple’s $1 trillion?

Apple became the first US company that is worth more than 1 trillion dollars. Amazon is also on its way to reach the magic number. Still, that’s a figure hard to grasp, so we looked for some comparisons to better understand how much Apple’s really worth.

After reporting a strong Q3 revenue, Apple’s stock crossed $207.05 on Thursday. Why is that such a special price? Because it made Apple the first American company that’s worth more than $1 trillion.

The (almost) trillion-dollar club

Despite common belief, Apple isn’t the first company to reach the $1 trillion mark. In 2007, PetroChina reached this valuation after its debut on the Shanghai Stock Exchange. Things soon turned south for the company, though. PetroChina’s stocks started to fall and by the end of 2008 the company’s value was only around $260 billion. Bloomberg estimates that this was the largest destruction of shareholder wealth in history.

Biggest companies by market capitalization

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While the story of the world’s first trillion-dollar company wasn’t a success, these days there are other companies that have the potential to reach the trillion-dollar mark. Amazon will reach that valuation if its stocks are worth at least $2,061.07. Now they’re sitting around $1,823 so there’s some way to go for them, but they have every chance to reach $1 trillion. Google owner Alphabet’s prices need to hit $1,441.09 to be in the elite club, while they are at $1,238.16 now. Others have a smaller chance, but Amazon and Alphabet may soon cross this barrier.

How much is that 1 trillion?

Imagining how much $1 trillion is rather hard for most people. It’s such a huge number that it can be compared to GDPs of whole countries. According to the data of the International Monetary Fund, the valuation of Apple sits between the GDP of Turkey ($849 billion) and Indonesia ($1.015 trillion). They are respectively the 17th and 16th strongest economies of the world.

What’s even more breath-taking is that – still according to IMF’s data – Apple’s valuation is more than the GDP of the 95 smallest economies of the world together. The summed GDP of these countries was “only” $996 billion in 2017. Of course, there are countries that still lead in front of Apple. The company’s value is roughly the two-thirds of Russia’s ($1.53 trillion) gross domestic product. It’s also 19 times less than the GDP US, which is the biggest economy of the world.

Still far from historical records

The news may be all about Apple, but there were far bigger companies than that in history. One of the very first company that had stocks, Dutch East India Company is the record holder up until today. After inflation adjustment, it was worth $7.9 trillion in 1637. Mississippi Company (which turned out to be a bubble) followed it close in 1720 with a value of $6.5 trillion.

Most valuable companies in history

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These days there’s a company that may be worth more than Apple: Saudi Aramco. In 2010, it was estimated to be worth $4.1 trillion, but it’s hard to tell what the truth is, since it’s a tightly controlled state-owned company (at least at the moment). These days Saudi officials say that it’s around $2 trillion but based on leaked documents Bloomberg estimates that it’s only worth $1.2 trillion.

Truth be told, Apple may also dip under the magic $1 trillion if its stock prices fluctuate, but since 2 August, stock prices only went a bit higher.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.