Apple Becomes World's 1st Private-Sector Company Worth $1 Trillion

Aug 2, 2018
Originally published on August 7, 2018 1:39 pm

Apple became the first private-sector company in history to be worth $1 trillion, after its share price reached an all-time high above $207 on Thursday.

The share price jumped by more than 8 percent this week after Apple reported impressive quarterly earnings on Tuesday, driven largely by strong sales for high-priced iPhones. In a call with investors, CEO Tim Cook also touted growth in other areas such as smart home products, wearable and services like the App Store and Apple Pay.

The $1 trillion milestone is largely symbolic, though impressive. Apple's market capitalization — a common financial measure of worth that multiplies the number of shares by the share price — makes the company worth more than the economies of, for example, Saudi Arabia, Switzerland and Taiwan.

The tech company, launched from a garage in 1976, has been on a steady climb through the years, revolutionizing personal computers and phones with its Macs and iPhones. In recent years, Apple has been working to spread its cult-like following to newer devices like smartwatches, cordless headphones and smart home speakers.

PetroChina once had a $1 trillion valuation, but only briefly, and most of its shares were owned by the Chinese government.

Other technology companies with high-flying, trendy stocks are expected to join Apple in the $1 trillion club before long. In recent years, the financial world considered Amazon and Apple to be in the race toward the milestone. On Thursday, Apple finished first.

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OK, Apple has become the first private sector company to be worth a trillion dollars. That's after its share price hit an all-time high today. Reporter Ryan Kailath has the story now that he's worked out exactly how many zeroes are in 1 trillion.

RYAN KAILATH, BYLINE: Twelve zeros, as it happens. You need four commas for a trillion dollars. Apple hit the figure when its share price jumped more than 8 percent this week. That's after the company reported strong quarterly earnings driven mostly by iPhone sales. The trillion and change is actually Apple's market capitalization. That's what you get when you multiply the number of shares by the share price. It's a historic moment, and the talking heads are talking.


UNIDENTIFIED PERSON #1: But yes, we officially hit it. We officially made history today. Apple did.


UNIDENTIFIED PERSON #2: Apple just hit a trillion dollars in market value.


UNIDENTIFIED PERSON #3: For the first time in history, a company is worth $1 trillion.

KAILATH: So big deal - super meaningful, right?

KIM FORREST: Kind of unimportant.

KAILATH: Kim Forrest is a portfolio manager at Fort Pitt Capital, and she says the number's largely symbolic. Apple doesn't unlock any new capitalist superpowers now that it's crossed the threshold. It just sounds cool. If anything, it means the company can borrow more money if it wants. Forrest likens it to, well, being rich.

FORREST: The bigger your house, the more you can borrow against it because the lender thinks that your house is going to be worth more tomorrow than it is today.

KAILATH: Some investors think this is actually a bad thing, a sign that Apple's stock is overvalued. Forrest says, maybe, but she adds Apple's got revenue on the books to back up its high valuation unlike some of its fancy tech sector peers. Some of those peers are likely to join Apple in the four-comma club. Amazon's close. But in the history books, you rarely learn who came in second. For NPR News, I'm Ryan Kailath. Transcript provided by NPR, Copyright NPR.