Last night, Apple became the first US company to breach the mark ofa $3 trillion market cap.The party lasted only a brief while, as the firm’s stock brought the valuation down to $2.99 trillion within a few hours.
Over the years, the iPhone has been the major force behind the Cupertino-based tech giant’s bottom line. More recently, its services business has also become an important contributor. Last quarter, services generated $18.2 billion in revenuefor Apple, with 25.6% year-on-year growth.
Last week, Daniel Ives, MD of investment firm Wedbush, said inan investor notethat Apple’s services business could be worth $1.5 trillion:
The linchpin to Apple’s valuation re-rating remains its Services business which we believe is worth $1.5 trillion in the eyes of the Street, coupled by its flagship hardware ecosystem which is in the midst of its strongest product cycle in over a decade led by iPhone 13. The Services business is further monetizing the Apple golden installed base and poised to reach $100 billion+ annual revenue by 2024.
The company registered $68.2 billion in revenue in services for the fiscal year 2021. Given its growth record over the years, the $100 billion revenue prediction seems achievable.
Apple’s services offering now consists of many products introduced over years: App Store, iCloud,Apple Music,Apple TV+,Fintess+,the Apple One subscription plan,Apple Card, and Apple Pay.
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AsReutersnoted, the firm’s shares are trading at almost 30 times its 12-month revenue of $366 billion. For comparison,Hong Kong’s GDP in 2020was $346 billion.
The company’s competitors have some way to go before they join the $3 trillion club. Microsoft is the closest with a $2.5 trillion market cap, while Google and Amazon are yet to breach the $2 trillion mark.
Story byIvan Mehta
Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That’s one heck of a mixed bag. He likes to say “Bleh.“Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That’s one heck of a mixed bag. He likes to say “Bleh.”
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