On Friday, June 30, 2023, Apple surpassed $3 trillion for the first time in its history, trading up more than 2 percent to a record high of $193.97 a share. The company was the first in the world to reach such impressive heights.
There are only six trillionaires in the market, five of which are in the US technology sector. Apple is followed by Microsoft ($2.5 trillion), oil and gas company Saudi Aramco in third ($2 trillion), Alphabet in fourth ($1.5 trillion), Amazon in fifth ($1.3 trillion) and last, reaching this year’s cherished milestone, Nvidia ($1 trillion).
Why are Apple shares rising?
Apple’s record was made official at the end of the trading day on 30 June on the Nasdaq stock exchange, six months after the company briefly surpassed the $3 trillion threshold in intraday trading on 3 January. Apple’s share price has risen 49 per cent so far this year, bringing its weighting in stock indices to an all-time high. According to S&P Dow Jones Indices, the company’s weighting in the S&P 500 rose to 7.6 per cent, the highest of any stock in the history of the main US index.
Experts agree that the tech maker’s share price has been influenced by a broader recovery in the technology sector, as well as a recovery in iPhone sales and the hype surrounding the Apple Vision Pro mixed reality headset, which will be released early next year.
IF Stocks analysts point out that Apple has earned a reputation as a “safe haven” back in 2021 during economic turmoil and has bounced back from drawdowns faster than other tech companies.
Quartz recalls that Apple has always been a trailblazer in the trillionaire club, reaching a capitalisation of $1 trillion in 2018 and $2 trillion in 2020.
Apple will ban brands from using apples?
Apple is known for its strict attitude to its intellectual property. For example, according to the World Intellectual Property Organisation, the company has sent infringement requests to dozens of IP authorities around the world with varying degrees of success. Authorities in Japan, Turkey, Israel and Armenia have agreed. In Switzerland, however, the case was not so easily resolved. According to Wired, Apple has been suing the 111-year-old Swiss fruit company Fruit Union Suisse for six years, and for most of its history the brand logo has featured a red apple with a white cross in the colours of the country’s national flag.
“It’s hard for us to understand because they’re not trying to protect their bitten apple,” says Fruit Union Suisse director Jimmy Marietoz, referring to the iconic Apple logo. – “Their aim is to own the rights to the real apple, which to us is something really almost universal… It should be free for everyone.
“Our concern is that any visual representation of Apple – that is anything that is audiovisual or related to new technology or media – could potentially be affected. That would be a very big limitation for us,” Marietoz added.
Over the past few years, Apple has sued over the use of fruit images with a cooking app with a pear-shaped logo, a singer named Frankie Pineapple, a German bike-route company, a couple of stationery manufacturers and even a school district.
A 2022 investigation by the non-profit Tech Transparency Project between 2019 and 2021 found that Apple has filed more trademark oppositions to enforce its intellectual property than Microsoft, Amazon and Google combined.
However, the Swiss Federal Railways won a $21 million lawsuit, proving that Apple had copied the design of a Swiss railway clock. In 2015, the existing trademark “Apple” in Switzerland, obtained by the watchmaker in the 1980s, forced Apple to delay the launch of its popular Apple Watch in the country.
Irene Kalboli, a professor at Texas A&M University School of Law and research fellow at the University of Geneva, notes that in Switzerland anyone who can show a history of use of a disputed mark has protection in a potential trademark dispute. This means that it may be difficult for Apple to enforce its trademark protection in proceedings against organisations that have used the apple symbol for decades.
The trial over the Fruit Union Suisse trademark could go on for several more years.
Is $4 trillion just around the corner? Apple’s outlook is alarming for fund managers
Most experts believe that Apple stock is promising and worthy of investors’ attention despite the company’s high cost. Investment bank Citigroup believes that Apple’s securities have a 30% upside potential. According to Citi analysts, the tech giant’s ability to boost profits is undervalued. They set the highest target price for Apple shares on Wall Street at $240. According to Bloomberg, 68% of firms tracked by the portal recommend buying Apple. However, this is a lower percentage than that of other mega-capitalised tech companies. Both Microsoft and Alphabet have buy ratings from more than 85% of analysts, while about 94% of experts recommend buying Amazon.
Analysts recommend a ‘Buy’ on Apple with a $200 target price.
Since 2018, Apple has built up a $1trn capitalisation over two to three years. While investors have benefited from the company’s rapid growth, fund managers face a difficult dilemma: they may not own enough Apple securities.
According to Reuters, according to the policy of many investment funds, they cannot exceed the limit allocated to a single stock – no more than 5% in the portfolio. Otherwise, it means taking on more risk. Thus, managers are forced to hold a smaller share of Apple securities than the company’s weighting in the S&P 500 – 7.6%. This means it will be harder for them to outperform the main US index, which is a goal for many investment firms.
*This message is for information purposes only and does not constitute individual investment advice or an offer to purchase the securities mentioned. There are additional risks involved in acquiring foreign securities.