Apple and Amazon lead the pack to $1 trillion market value

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Apple, headed by Tim Cook (pictured), and Amazon are leading the race to become the world


Apple and Amazon are leading the race to become the first trillion dollar company.

The companies are closely followed by two other US technology giants – Google and YouTube’s parent company Alphabet Inc, and Microsoft – in the fierce battle to reach the historic valuation.

Apple, currently valued at $939 billion (£716 billion), remains the highest-valued private company on the global markets.

Experts believe the firm, which has enjoyed huge success worldwide with its iPhone, iPad, MacBook ranges, could cross the $1 trillion (£0.76 trillion) finish line when it publishes its latest quarterly results on Tuesday July 30.

But online retail firm Amazon is close behind – on Friday, its market cap reached some $917 billion (£700 billion), before finishing at $882 billion (£673 billion), thanks to quarterly figures well received by investors.

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Pictured is Amazon founder and CEO Jeff Bezos

Apple and Amazon are leading the race to become the world’s first trillion dollar company, according to the latest figures. Pictured is Apple CEO Tim Cook (left) and Amazon founder and CEO Jeff Bezos (right)

Alphabet ($886 billion/£675 billion) and Microsoft ($827 billion/£630 billion) are hot on their heels, while Facebook ($505 billion/£385 billion) is out of the race, having shed an unprecedented $119 billion (£90 billion) in value after its results Thursday.

The biggest traditional economic players – billionaire Warren Buffet’s holding company Berkshire-Hathaway ($492 billion/£375 billion) and bank JPMorgan Chase ($395 billion/£301 billion) – have been relegated to mere spectators.

State oil company PetroChina briefly broke the $1 trillion barrier in 2007 during its initial public offering, but has since dropped back down.

Stock for online retailer Amazon was the most popular buy in the first half of 2018, with Apple the second most popular sell, according to a mid-year review by TDAmeritrade.

‘The retail trader who is buying that stock is also the same person who is probably an Amazon client,’ said JJ Kinahan, a chief market strategist for the Omaha, Nebraska brokerage firm.

‘They see a stock that has plenty of upside and benefiting from the money people have to spend with the economy and the job market improving,’ he added.

According to TDAmeritrade's mid-year review, online commerce giant Amazon's stock was the most popular buy in the first half of 2018, with Apple the second most popular sell (file photo) 

According to TDAmeritrade’s mid-year review, online commerce giant Amazon’s stock was the most popular buy in the first half of 2018, with Apple the second most popular sell (file photo) 

But Apple, which has a solid track record of unveiling record-high after record-high when it comes to its quarterly earnings call, holds its lead.

Ken Berman, Gorilla Trades strategist, is convinced that Apple will reach the $1 trillion mark after its Tuesday results, thanks to its range of iPhones, growing interest in the iPad and strength in its services.

‘I don’t think Apple stock is that expensive,’ said Nate Thooft of Manulife Asset Management.

‘The tech sector is the safe haven of the equity market right now.’

Analysts insist the situation is a far cry from that in the late 1990s, when several start-ups exploded on Wall Street – only for the ‘dot.com’ bubble to burst.

Experts believe Apple could well cross the $1 trillion (£0.76 trillion) finish line after it releases its quarterly results Tuesday (file photo)

Experts believe Apple could well cross the $1 trillion (£0.76 trillion) finish line after it releases its quarterly results Tuesday (file photo)

‘The big problem with the internet bubble was that the majority of businesses did not have revenues, did not have profits, many just responded to a fashion phenomenon,’ said Gregori Volokhine of Meeschaert Financial Services.

‘That’s not the case with all these companies that today have an essential place in people’s lives,’ Volokhine said.

‘Most of the leading tech companies in the late 1990s were trading at 100 times earnings,’ added Edward Jones investment strategist Kate Warne. ‘Very different than today.’

Apple’s price/earnings ratio stands at 18.62, underperforming the S&P 500 (20.86), the index representing the 500 biggest businesses on Wall Street.

WHICH FIRMS ARE RACING TO BECOME THE WORLD’S FIRST TRILLION DOLLAR COMPANY?

Four US tech firms are battling it out to become the world’s first trillion dollar company.

Appke is leading the way with a value of $939 billion (£716 billion), making it the highest-valued private company on the global markets. 

But Amazon is right behind, reaching $882 (£673 billion) billion as the markets closed on July 27.

Microsoft and Google’s parent company Alphabet are close behind, valued at $827 billion (£630 billion) and $886 billion (£675 billion) respectively. 

Facebook ($505 billion/£385 billion) is out of the race, having shed $119 billion (£90 billion) in value after results released July 26.

The biggest traditional economic players – billionaire Warren Buffet’s holding company Berkshire-Hathaway ($492 billion/£375 billion) and bank JPMorgan Chase ($395 billion/£301 billion) – have been relegated to mere spectators.

Figures accurate as of July 30, 2018.

But even in case of economic crisis, the technology sector is in a good place, according to Maris Ogg, founding principal of Tower Bridge Advisors.

‘If you start to see the economy slowing, if companies have to cut cost, to fire people, they will invest in technologies towards more automation,’ she said.

For Nicholas Colas of DataTrek Research, it is also hard for investors to evaluate the business strategies with a fairly new business model.

‘Equity valuations for FANG (Facebook, Amazon, Netflix and Google) stocks and other internet-enabled business models is a fundamentally new challenge for investors,’ he said.

‘At their core, they are ideas created by a handful of people, developed/maintained by perhaps 10,000 coders (and sometimes much less), but then used by billions around the world. This is a new phenomenon, and we suspect equity markets do not yet understand what ‘correct/normalized’ valuations should be.’





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