Tag Archive | "Apple"

Will Apple Be The First Trillion Dollar Company?

How Close Apple Is To Being The First Trillion Dollar Company

Apple Making Money

Will Apple be the first trillion dollar company? Although a lofty goal that no other company has come close to achieving, that question is not so implausible as it once was. With Apple, Inc. continuing to report impressive revenue and earnings and its stock (NASDAQ: AAPL) on an upward trajectory, the one trillion dollar market capitalization mark is not as far off as it used to be. Apple is now the largest company in the world by market capitalization, and with its growth rate showing no signs of slowing and the company expanding its product offerings, it could very well be the first trillion dollar company in human history in the not too distant future.

As of the spring of 2015, Apple is a $762 billion company, based on its market capitalization. That means it is already three-quarters of the way to becoming the first trillion dollar company in the world. AAPL would have to rise by slightly over 31 percent from current levels to reach the lofty one trillion dollar level. That may be a tall order for a company that alreasdy boasts a stock trading at $131 per share and has a lot of good news baked into its stock price, but it is not an impossible threshold to reach. If any company can reach trillion dollar threshold first, Apple is up to the task for a number of reasons.

How You Figure Out Apple’s Market Capitalization

Apple Trillion Dollar CompanyBefore we go into the reasons, let us take a look at how a company’s market capitalization is calculated. It is a simple formula. To arrive at a company’s market capitalization, you take the total outstanding shares a company has and multiply the number of shares by the current stock price. That gives you the total value of the company, if for example, another company purchased every outstanding share at the current stock price.

In Apple’s case, there are 5.82 billion AAPL shares outstanding. With a stock price of $131 per share, Apple’s market capitalization is $762 billion. To get to the $1 trillion market capitalization mark, Apple needs AAPL to get to $172 per share, assuming no change in the total number of outstanding AAPL shares.

Apple Has Momentum Running Up Against Its Huge Market Capitalization

Why is it that Apple may be destined to be the first trillion dollar company? Apple has a big head start over the competition for starters. But, beyond their leading market capitalization, the company has a lot going for it that could propel it over the trillion dollar level.
Apple Trillion

The reality is that Apple has a lot of momentum behind it.   Over the past two years, AAPL has more than doubled in price, as the company has continued to wow Wall Street with revenue and earnings reports that beat Wall Street investor’s expectations.   With Apple’s earnings projected to grow at a considerably faster rate than the growth rate for the average Standard and Poors 500 (S&P 500) stock, investors may eventually reward Apple with a higher price to earnings (P/E) multiple than its currently relatively benign price to earnings (P/E) multiple around 17.

What may be holding Apple’s stock back from trading higher is its huge market capitalization. Stock market participants seem to be in disbelief that Apple can actually continue to rally higher with such a lofty market capitalization. However, just like the unloved stock market rally since the Great Recession, Apple just keeps chugging higher, boosted by solid earnings growth and good prospects for future growth.

Why Apple May Be Destined To Be The First Trillion Dollar Company

There are three major factors that may propel Apple over the trillion dollar mark over the next few years, making Apple the first trillion dollar company in the world.

  1. Continued sales growth in their flagship iPhone product is boosting earnings and expectations for AAPL. The iPhone 6 has been a big seller in 2015. Many existing iPhone owners have yet to upgrade to the iPhone 6. Added to that is new iPhone customers that are mushrooming both inside the United States and in foreign markets that Apple is targeting, such as China.       iPhone sales were so strong in the first quarter of 2015 that they came in at 74.5 million in sales versus the 66 million in iPhone sales that analysts were expecting for the quarter. Additional quarters like this should send Apple’s stock closer to the trillion dollar mark.
  2. While the jury is still out regarding the ultimate success of the Apple Watch, it has the potential to be a big winner for Apple in the long run. Apple has a way of turning ideas that others think have little value into big winners. If the Apple Watch gets hot, it could provide another boost to Apple’s earnings, propelling the stock even higher. Many analysts have been skeptical about the success of Apple’s Watch. If they are proven wrong, look for upside surprises in earnings and revisions higher in AAPL’s stock price estimates.
  3. Apple Pay may be the thing that ultimately makes Apple the first trillion dollar company. The future of money is cashless and paying with things such as your mobile phone. With so many iPhones in circulation, Apple has a huge advantage over the competition as it tries to establish itself as the dominant player in the electronics payment business. Retailers are getting on board and Apple has made agreements with most banks in the United States to accept Apple Pay. Once Apple Pay gets rolling and starts generating revenues and earnings from Apple Pay, the trillion dollar mark could be a foregone conclusion.

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The Influence Social Media Has On Trading

Since 2012, we’ve seen an ongoing trend that many investors and traders are concerned about. It seems that the influence social media has on trading has increased greatly, affecting share prices in a number of ways. Most of the time social media’s influence has garnered negative impacts on affected markets though there have been occasions where benefits were gained.

(Photo credit to: eFinancialNews.com)

(Photo credit to: eFinancialNews.com)

Understandably this was probably not Mark Zuckerburg’s or Jack Dorsey’s intentions as they began to create their innovative social media platforms. Regardless of the initial motivation, while Facebook may have a larger user base, the latter plays a much more significant role in the trading world. Recent developments have show actual proof of how effective a tweet can be from the right person.

With social media becoming more integral in our lives, what can we expect with market influence? Will this bullish ploy be infinitely valuable or will we see this phase end as a result of some catastrophic event?



Social Media Continues to Impact The Market

Call me a pessimist or a cynic, but so far social media’s involvement in the stock trading world has not always brought good tidings. Just look at last April when the news source Associated Press had their Twitter hacked, causing extreme drops in stock prices. This feat was accomplished with one mere tweet. It’s proven that the influence social media has on trading can be very harmful in a very small amount of time. With everyone connected to one form of social media or another, its almost as if this trend was inevitable. Look at the effect it’s had on the stock industry. There are now firms who that have set up shop who are only trading based on social media influences. That kind of trading can be dangerous especially with a large amount of capital to support it.

(Photo credit to: TeraMoney.com)

(Photo credit to: TeraMoney.com)

More recently the influence social media has on trading actually resulted in profits for those invested in the technology titans, Apple. How did Apple benefit from social media’s hand? A domino effect occurred from the time billionaire shareholder Carl Ichan posted a series of tweets regarding Apple currently being undervalued as well as a conversation he had with Apple’s CEO Tim Cook.

How Does Social Media Influence Stock Trades?

When looking at the bigger picture its easy to see how we’ve arrived at this juncture. As technology advances and we receive information at a faster rate, of course we are going to make more impulsive decisions. We’re reacting by the information we receive in that split second rather than looking at the larger spectrum. Former Reuters social media editor Anthony DeRosa explained it perfectly in somewhat ironic tweet. You can see below how this simple formula can result in both positive and negative manners.

(Photo Credit to: Business Insider.com)

(Photo Credit to: FastCompany.com)

What it comes down to is the fact that influencers have an unbelievable amount of power in the smartphones they carry. They can sway the masses, and the important individuals, the ones investing your money into believing or going along with various ploys. Take the tweet posted by Carl Ichan and Apple for example. Within minutes, Apple’s share price jumped from the opening price of $470.94 up to $493.

Twitter Analytics manager Miguel Rios posted this within minutes (Photo credit to: FastCompany.com)

Twitter Analytics manager Miguel Rios posted this within minutes (Photo credit to: FastCompany.com)

As I write this, the age old mantra spoken by Ben Parker comes to mind. “With great power comes great responsibility.” Yes, I just quoted a comic book character. Regardless, the statement holds true. What will be the fate of the market as social media continues to influence pivotal trades? Will this become a normal occurrence or will something happen that will ban any type of stock or finance chatter from the digital grapevines?

How to Use Social Media to Your Advantage

For now, those with the “glass half full” mindset will undoubtedly take advantage of this new trend. To those brave individuals, heed my warning. Tread lightly and don’t throw your trading fundamentals out the window. Think about what the influencer posting these messages has to gain before acting. If it can benefit you, take advantage of it while you can. Once we begin to encounter huge losses by reacting to false information, this method of real-time trading will most likely come to an end. Of course, this is purely an opinion generated by past events and some logical thinking. There is, as always room for error.

Trading Influenced By Social Media Wrap-Up

For now, we will continue to witness the influence social media has on trading as some profit while others lose. I’m definitely curious to see how key influencers in the trading industry will begin to utilize this technique and how it affects the Stock Market in both the short and long-term scheme of things. While whole hedge fund and broker agencies put all of their eggs in the social media baskets, I’ll stick to the good ol’ fashioned research taking social media’s opinions with a grain of salt.

What are your thoughts about social media’s involvement in trading? Do you base your trading decisions off of what influencers are posting?

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Apple Stock Dropped Under $400 This Past Monday


Hopefully Apple’s CEO Timothy Cook has something up his sleeve after hitting a low of $398.05 midday this past Monday. This is the first time Apple stock dropped under $400 in the past sixteen months. As the market closed for the day Apple recovered a few dollars closing at the stock price of $402.54 in the NASDAQ. After a promising rise at the start of their World Wide Developers Conference (WWDC) their stock began to drop for the past two weeks. Here, we’ll take a look at other points when Apple’s stock was in the news and what we could possibly speculate as the reasoning behind Apple’s decline, and what the future holds for the technological titans.

Apple Stock in the News

apple stock drops

(photo credit to: AppleGazzette.com)

Apple (AAPL) has never been one to be neglected by reporters and headlines with announcements and releases on upcoming software or events. Most recently we saw the premiere of the new Steve Jobs biopic titled “Jobs” starring Ashton Kutcher as the innovative genius and his journey with Apple. Add this to the constant buzz surround Apple’s latest operating system iOS7 and the “leaked” iPhone 5S photos to create a dizzying frenzy of everything Apple.

The last time Apple stock prices were in the news was mid April where Apple’s stock dropped below $400 for the first time in sixteen months. Over the last nine months Apple’s stock price has continued to steadily drop which came as a shocker to those who thought the recently announced dividend program would put a spring back in the stock’s step. Even a projected $100 billion payout plan for all investors by 2015 wasn’t enough to get Apple’s stock to rise. We will get into why Apple stock is falling soon enough.

History of Apple Stock

While Apple’s products have made the innovative company household names, their stock has seen better days. Investors and analysts alike seem to be having a problem honing in on target prices and projections, besides one character who we will talk about in the next section. The last time Apple stock price went below $400 was in December 2011. Compared to June, May was a much better month for investors with Apple stock price peaking at $450. As stated above, that was due to the excitement and hype surrounding WWDC ‘13. With June coming to a close, analysts are wondering how Apple will hit their target prices as investors are hoping Cook has an Ace in the hole.

Why is Apple Stock Is Falling?

Apple Stock Drops

(photo credit to Apple @ Yahoo Finance)

Now, we’ll look at the possible reasons why Apple stock is falling. There has been an assortment of hearsay and rumors surrounding the new iPhone 5S and iOS7. Last Friday however, Peter Misek of Jefferies & Company reported to clients that Apple will be producing fewer iPhones than they originally expected for the rest of this year. Combining that with the initial folly of Apple Maps to understand it’s current reflection to Apple’s stock prices. It seems that Misek is one of the few analysts at this point who has a clear pulse on Apple stock, but how long will it last? Will the iPhone 5S not be enough to put Apple stock price rising once again?

Apple Stock Predictions: Is It A Good Time to Buy Apple Stock?

At this point, it could be a good time to talk to your broker about adding Apple to your portfolio. Apple stock price has not dipped below $400 in almost sixteen months, and the fall season could bring Apple back to the top. History has shown a drastic increase in stock price whenever Apple releases a new product. With two products being set to launch in the next few months you may benefit from buying Apple stock now at a low point of just over $400. Their new products and the upcoming Steve Jobs movie can be the game changer Apple has been looking for.

Even Timothy Cook has his fingers crossed for a great end to this year as he recently changed his stock compensation. Upon his request, Cook’s compensation will now be focused on Apple’s actual progress. With his stock options currently valued at $413 million Cook has a lot to lose if Apple continues to perform poorly.

What are your thoughts on Apple’s recent market low? Are you considering buying stock in Apple? Do you think their upcoming releases will be enough for them to hit projected target prices? Let us know!

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