Apple Hits New Record North Of $600 Billion In Market Cap

Tyler Durden's picture




 

Update: in the 20 or so minutes since uploading this article, AAPL added another OpenTable in market cap. It has in the course of a day added the same market cap as Linked In and just shy of Sony.

Moments ago Apple, long since the largest company in the world by market cap, just crossed $600 billion in capitalization, needless to say a record high, after adding the equivalent of 2.4 RIMMs in market cap in a few short hours. As of this moment, the company that makes a phone, a tablet, various computers (all of which now have an upgrade lifecycle inside of 1 year and ever shorter), has a product "ecosystem", retail stores and may be launching a cable box, is larger than the entire semiconductor sector, larger than the entire retail index, and at this rate of parabolic blow off top growth, will be larger than both combined in about 5-6 months. We can only hope that the company will soon use its $110+ billion cash hoard to launch a captive bank to finance the purchase of its products because unless consumers' disposable incomes are growing at the same rate (with penetration already quite high), and assuming of course it is still cool to have an AAPL product in a few years (just as it was the peak of coolness to have a Palm Tungsten a decade ago... or a RIM phone 5 years ago), the company that is now owned by about 250 hedge funds will certainly have growing pains in the future.

Blue is Retail sector; Red is Semiconductor

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Fri, 08/17/2012 - 14:59 | 2714940 slaughterer
slaughterer's picture

DRIP reinvestment today.

Fri, 08/17/2012 - 15:00 | 2714942 redpill
redpill's picture

Every AAPL eventually falls from the tree.

Does Samsung make chainsaws? 

Fri, 08/17/2012 - 15:03 | 2714947 nope-1004
nope-1004's picture

iCarumba

Emotions are clearly pushing this stock now.

 

Fri, 08/17/2012 - 15:13 | 2714985 The Big Ching-aso
The Big Ching-aso's picture

 

 

Hope this doesn't become iFacebook.

Fri, 08/17/2012 - 15:36 | 2715052 AldousHuxley
AldousHuxley's picture

companies usually top out when they waste money on some new campus. apple's due 2015.

 

look at NFLX to see violatility of tech stocks....

Fri, 08/17/2012 - 15:50 | 2715089 SilverTree
SilverTree's picture

Someone whip out a chart of the AAPL to GOLD raito.

Fri, 08/17/2012 - 16:14 | 2715171 palmereldritch
palmereldritch's picture

iSilver?

Time for Apple to hedge that market cap and maybe start a competing currency or two....

Fri, 08/17/2012 - 20:55 | 2715860 tenpanhandle
tenpanhandle's picture

Buy AAPL because gold is in a bubble.

Fri, 08/17/2012 - 15:18 | 2714995 insanelysane
insanelysane's picture

Analysts are saying that people will go without eating out and new clothes in order to buy more iCrap.  If that's the case, then it is pricing in.

Fri, 08/17/2012 - 15:37 | 2715057 AldousHuxley
AldousHuxley's picture

that's nothign compared to money wasted on new cars......illegal mexicans drive around cadillac SUVs now.

Fri, 08/17/2012 - 17:54 | 2715508 neohuman
neohuman's picture

Every time i see those 22 inch shinny rims  I just shake my head.

Fri, 08/17/2012 - 20:05 | 2715803 monoloco
monoloco's picture

All the twenty-somethigs occupying moms couch these days need new shiny devices to keep up on their Facebook and play Angry Birds. Don't count Apple out, their devices are cheap entertainment for the unemployed. 

Sat, 08/18/2012 - 05:16 | 2716252 DavidC
DavidC's picture

Cheap?!

DavidC

Fri, 08/17/2012 - 15:22 | 2715009 mirac
mirac's picture

Burning APPLwood smells nice when burning and can be used in BBQ for flavor

Fri, 08/17/2012 - 16:00 | 2715133 poor fella
poor fella's picture

I've done apple-bacco in a hookah. Smooooooth.  Apple should use it to print shares on.

Fri, 08/17/2012 - 17:48 | 2715496 neohuman
neohuman's picture

Wasn't Nokia on that cool list 13 years ago?

Sat, 08/18/2012 - 16:16 | 2716998 Doublescythe
Doublescythe's picture

$120B in cash, almost $0 in debt, and generating about $1B in free cash flow every day. 

You do the math. This company is an asset class unto itself - multiples are far more compressed than anything else in the market - if Apple splits 10:1, look out - you'll see the stock price at an effective $1,000 share price.

The reason these companies win (Apple, Google, Amazon) is software and automation - everything else fails.

IN THE END, HE WHO HAS THE BEST SOFTWARE KILLS EVERYONE ELSE. 

I continue to be long $AAPL. Good luck to all.

Sun, 08/19/2012 - 01:39 | 2717676 ToNYC
ToNYC's picture

Cheap phones call up the Law of Gravity, dropping a dime on the Emperor's new and oldriginal designs.

Fri, 08/17/2012 - 15:46 | 2715083 Freddie
Freddie's picture

Tylers - please have more banner ads with girls in T-shirt versus the Muslim and his Wookie 2012.  

Tell the t-shirt company to hire t-shirt girls with bigger breasts-es.  Ask them if they can make those banner ads 3-D.

Fri, 08/17/2012 - 15:50 | 2715088 LongSoupLine
LongSoupLine's picture

iHFT

Fri, 08/17/2012 - 15:00 | 2714943 falak pema
falak pema's picture

when the Hf become mutual funds....stampede! 

Fri, 08/17/2012 - 15:02 | 2714950 Tinky
Tinky's picture

iCarumba!

Fri, 08/17/2012 - 15:03 | 2714952 BLOTTO
BLOTTO's picture

At the rate AAPL is rising - it would bloody well need to own the fuckin entire WORLD for the stock to keep performing at this pace...

Is that likely?

 

Fri, 08/17/2012 - 15:31 | 2715037 johnQpublic
johnQpublic's picture

YES

Fri, 08/17/2012 - 15:54 | 2715107 stickyfingers
stickyfingers's picture

NASA's checking for buyers on Mars.

Fri, 08/17/2012 - 18:20 | 2715585 smiler03
smiler03's picture

I was curious about $600 billion compared to the richest individuals.

According to the Forbes top ten list of billionaires 2012

http://en.wikipedia.org/wiki/Forbes_list_of_billionaires#2012_Top_10

The top ten amount to $395 billion.

So the one good thing I can see is that those rich bastards are mere ants compared to the crappy AAPL.

 

Fri, 08/17/2012 - 18:20 | 2715589 BurningFuld
BurningFuld's picture

What if there were something on the market better than an ipad? AND people actually knew about it?

http://betanews.com/2012/08/10/4g-lte-blackberry-playbook-makes-ios-and-...

Fri, 08/17/2012 - 15:07 | 2714962 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

A RIM phone was never cool.

Fri, 08/17/2012 - 15:49 | 2715086 Robot Traders Mom
Robot Traders Mom's picture

A RIM job was though.

Fri, 08/17/2012 - 20:59 | 2715869 tenpanhandle
tenpanhandle's picture

only on the receiving end, I am told.

Fri, 08/17/2012 - 15:08 | 2714965 DannyTX
DannyTX's picture
Article Dated 03-29-12----Apple closed that day at 609.86 http://www.zerohedge.com/news/apple-conundrum-why-one-fund-not-buying-ikool-aid   Today it is making new highs as of now 647.    Consdider the following and tell me this makes the least bit of sense at all:   “When we look at our cash flow models, assuming Apple can maintain its current operating margins (a heroic assumption in the face of increased competition in the tablet market), to justify the current stock price, it appears to us that Apple will have to sell about $2.6 trillion worth of total products and services over the next ten years. Last year’s revenues (for the fiscal year ending 9/24/11) totaled $108 billion. If Apple’s margins shrink, it will have to sell a lot more. This level of Apple product sales will make up almost 1.5% of U.S. GDP (of course it also sells products outside of the U.S.). That means that with the average GDP per capita in the United States being around $50,000, each person must spend $750 on Apple products and services annually (since 30% of sales are domestic, this means that about $225 per U.S. citizen would go to Apple every year). Since not all 310 million people in America use Apple, those who do need to spend a lot more and the vast majority of those sales will need to be on devices because iTunes sales do not bring much profitability.”

That is $225 for every person, whether homeless, infant, or a nursing home resident.  This is absure!!!!!!!  And this is why QQQ is up over 22%.

Fri, 08/17/2012 - 15:23 | 2715013 adr
adr's picture

$225 for every person in the USA, but not everyone buys Apple.

They have 41% of the smartphone market, and about 18% of the overall cell phone market in the USA.

If everyone had cell phones in the US that would mean Apple could have sold a maximum 55 million phones. Of course the real number is far, far lower.

Apple supposedly makes about $118 per iPhone sold, which given absolute market penetration would give you $6.5 billion in profit.

Somehow the company is worth over $600 billion?

Sat, 08/18/2012 - 12:21 | 2716641 I am a Man I am...
I am a Man I am Forty's picture

They have $117B in cash, actually probably more like $120B now and no debt, so minus cash is $480B.  They make over $40B in profit per year.  They sell a bunch of iPads, Macs, Music/iPod's too, so not just the iPhone.  But keep at it, keep doing your DD, and you might get to where you need to be.  And why you are only talking about the USA for selling phones doesn't make a lot of sense because apple sells phones all over the world. Places like China.

They are getting ready to have the largest product launch the world has ever seen in the iPhone5 and smaller iPad, coming out with a apple tv product too.  Think what you want about apple products but people buy them hand over fist.  I've been bullish on this site about apple at least 200% ago that can be tracked.  Trying to get Reggie to stop making a fool of himself too, he wouldn't listen.

Apples PE is 15, forward PE of about 12, this is a very fair and relatively conservative valuation for a company like Apple.  Take out the cash, even cheaper.  So yes, the company is worth $600B, and that somehow is because they are a debt free cash generating machine.

Sun, 08/19/2012 - 01:03 | 2717653 Bear
Bear's picture

Forward PE? ... they are going to make 50 Billion next year? What if they only make 30 billion and stock goes to 720 ... forward PE = 24 (12x2)

Fri, 08/17/2012 - 15:08 | 2714966 resurger
resurger's picture

No bubble here, move along

Fri, 08/17/2012 - 18:01 | 2715532 Spastica Rex
Spastica Rex's picture

iTulip!

Oh, wait -- sorry.

Fri, 08/17/2012 - 20:57 | 2715864 Fred Hayek
Fred Hayek's picture

Not like that gold and silver stuff that looks obsolete after just a year owning it.

Fri, 08/17/2012 - 15:09 | 2714970 falak pema
falak pema's picture

OT /  Battle of the Giants over Japan : 

ZH had an article saying that Kyle Bass's bet on Japan's demographics pulling down their economy was a given and that the massive short he had taken was beginning to show signs of payout.

Here is an article from BI that indicates that BOA has taken a contrary position.

Ominous, when Oligarchs fall out...

Shogo Fujita On JGB - Business Insider

Fri, 08/17/2012 - 15:21 | 2715008 fonzannoon
fonzannoon's picture

Nice catch falak

Fri, 08/17/2012 - 15:09 | 2714972 adr
adr's picture

There has never been a more idiotic and undeserved stock ramp in history, than the bullshit run in Apple this year.

Are we really supposed to believe that Apple is worth $1000 a share or more? Apple misses earnings and is rewarded with all time highs.

The early release photos of the iPhone5 aren't looking like a world beating product. The phone will be thin, but the Droid Razor is already thinner than the new iPhone prototypes. In fact what has been leaked of the new iPhone looks like a huge step back in terms of design. Then there is the change in the dock connector. Soon to be the most hated peripheral change in history.

Apple is going to push the limits of the cult insanity around its products. The iPhone5 can't live up to the hype and the $600 billion market cap. Apple will make a razor thin unusable piece of trash, that people will still buy, just to be seen holding it. The problem is to get anything done they might need to have another phone in their pocket.

Fri, 08/17/2012 - 15:51 | 2715090 Freddie
Freddie's picture

The reason for the run up.

Theives broke into Jobs house the other day and stole computers.  They found plans for iPhone iAnal.  It is a  iPhone you put in your anus for phone sex.    Very cutting edge or bleeding edge technology.  It is a metrosexual product for either gender and undefined genders.

Fri, 08/17/2012 - 16:07 | 2715167 tawse57
tawse57's picture

Then there is the change in the dock connector. Soon to be the most hated peripheral change in history.

Yep, very good point.

Fri, 08/17/2012 - 19:30 | 2715734 slewie the pi-rat
slewie the pi-rat's picture

it IS a cult

and theHungerGames just blew off the sales record of the entire harryPotter series according to amazoni

mass reading?

again?  dese utes 0'today!  we're d0^0med!

Sat, 08/18/2012 - 15:21 | 2716911 I am a Man I am...
I am a Man I am Forty's picture

You clearly don't own an iPhone.  The stability and rise of Apple's stock price is mainly due to the fact they now pay a dividend.  And if you look at Apple's multiple and compare it to, say, Verizon, that has a multiple of 44, or Google with a multiple of 20, where apple has that oh so crazy multiple of 15 (forward 12), you might start to understand why Apple is trading where it is.

But if you can find me another company that makes $40B plus in profit a year with zero debt I'm all ears.

My iPhone4S is a great phone.  My Droid Incredible sucked.  Never owned a Samsung.

 

Fri, 08/17/2012 - 15:14 | 2714982 dolph9
dolph9's picture

Apple products are nice but they are now based on the principle of minimalism.

Taken to its extreme, it would mean that eventually you reduce a product to having nothing at all.  It would just be something to stroke, something that looks cool, but has little to no functionality.

It's obvious...Apple has outlived its usefulness.  You can't get rid of the screen itself, right?  Which means minimalism has gone as far as it can go.

It's mass madness, people.  Other than the original iPods, which were indeed clever, even if they weren't original, I can think of no way in which Apple products improve one's life or the world.

Fri, 08/17/2012 - 15:38 | 2715061 sitenine
sitenine's picture

All that being true, you still shouldn't underestimate the importance of being perceived as cool.

I teach an intro to computers class, and I see 50-75 computer newbies every quarter, and have done so for over 6 years now. Students often confide in me about what laptop or tablet they are thinking about getting. I would estimate more than half are initially thinking about an Apple product. So, I sit down with them, and we discuss their needs which usually brings us to the conclusion that a PC would be the most useful choice for their computing needs. So far so good. Frustrating though, I would estimate that at least 75% of those consultations come back to me saying they went with the Apple product. I've given up on scratching my head over this, and have since declined to consult on what product might be a best fit for someone. Frankly, they don't care.

Fri, 08/17/2012 - 16:29 | 2715270 SoCalBusted
SoCalBusted's picture

It's a fashion accessory.  Think LULU, CROX, etc.  There's no logic in it, other than lemming logic.

Fri, 08/17/2012 - 16:41 | 2715313 VulpisVulpis
VulpisVulpis's picture

Exactly. Ascribed value.

Fri, 08/17/2012 - 18:44 | 2715634 smiler03
smiler03's picture

In that context I can see the popularity of Apple products being directly correlated to Facebook popularity. Same generation, same users.

Look at Facebook now.

My son very recently bought an iphone and already has 11 places listed on Facebook where he's been. He's got a good University Degree in Biomechanical Engineering but works in his girlfriend's fathers factory making cardboard boxes for a minumum wage.

I think it's a lost generation and it can only get worse. I also think it's NOT their fault but I do honestly feel embarrased for him. His sister/my daughter qualifies as a medical doctor next year. She has an HTC all singing blah blah blah phone. I have a Samsung E2121B (cost £10).

Rotten Apple is like a Queen ant being fed my a million worker ants tending her thousands of eggs of soon to be worker ants. Ad infinitum.

 

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