The world is weeks — maybe days — away from witnessing the emergence of the first $1 trillion ($1,000,000,000,000) enterprise. For the first time in human history a publicly traded company is expected to surpass this hard-to-imagine threshold. The company to claim the title is likely to reap substantial financial benefits, along with positive press coverage and an opportunity to drive the stock price even higher.
As of now, Apple is the most likely candidate. The company can boast a market cap of $975 billion, which is painfully close to the cherished goal. But the competition is tough! Amazon is the second most likely contender. Up until recently, both Apple and Amazon had approximately the same chances of reaching the goal. On July 25 both companies have been valued at approximately the same level, with a total market capitalization of $908 billion for Amazon and $943 billion for Apple. However, since then Amazon has fallen in price to 1,797 per share, which resulted in a sudden drop to $876 billion.
After the release of its most recent earnings report, Apple is almost guaranteed to win the race. Its revenue has demonstrated a 17% increase, the net income per iPhone has also gone up. The company has sold less units of its flagman smartphone but due to higher price earnings have still exceeded the expectations. Over the course of only one quarter, the company has earned $53,3 billion, $1 billion more than previously expected. This is the Apple’s most successful quarter since the inception. Keep in mind that new Apple products are announced during the fall and december is usually the most profitable month for the company. Apple, therefore, is almost guaranteed to surpass the $1 trillion threshold before the beginning of 2019. All in all, the company has sold 41,3 million iPhones, only 1% more than during the same period last year. However, due to a higher unit price, received 20% more revenue.
Services — such as iCloud, Apple Music, Apple Care — have demonstrated the highest growth rate among all product categories. Stimulated by bigger than expected returns, the price of AAPL shares has surged 2.5% following the announcement. As of now, Apple is sitting at $980 in market capitalization. The company only needs to add another 3% to its market cap to reach the $1 trillion mark.
But not so fast! There is always an opportunity for a high-tech company to plunge. Facebook, once the Silicon Valley’s most admired startup, has lost $120 billion of its market value over the course of one day! The company was expected to report 43% higher earnings, yet only managed to demonstrate a 42% increase. This coupled with other long-lasting problems, triggered a selling rally. Facebook lost whopping 21% of its value in a few days. But can this really happen to Apple? Who knows…
But what about Amazon, does the company still has a chance to contend with Apple? Yes, and here is why: since the beginning of 2018 Jeff Bezos’ enterprise has surged 55%. Over the course of 4 years Amazon grew in price 4 times, thus making Jeff the richest man on the planet. Amazon needs to grow 13% to become the first $1 trillion company. Should Apple make a mistake that would result in a stock price decrease, Amazon can be expected to take the lead.
Certain experts believe that Amazon can go much higher than $1 trillion, and not without a reason. The market share of a newborn internet giant is still minor in many spheres it operates. As the time goes by and the market share of Amazon grows, the stock price and the market capitalization will follow. Most analysts believe that Apple would be the first one to cross the $1 trillion line, while Amazon can be expected to follow.
Whatever the company makes the leap first, you can trade both on the IQ Option platform right now.