Thomas Lyons 
Apple Nears $3tn Market Valuation Amidst 2023 Rally
Apple’s stock has surged 35% this year, adding almost $690bn in market value and bringing the tech giant back to the brink of a $3tn market valuation. This rally has been driven by investors flocking to the iPhone maker’s steady revenue and massive cash flows. The company’s impressive performance has also made it a favorite among institutional investors, hedge funds, retail investors, and Warren Buffett. Apple is now within striking distance of its January 2022 record.
Patrick Burton, a portfolio manager at MainStay Winslow Large Cap Growth Fund, which owns nearly 4.5 million shares of Apple, remarked on the latest data, “In my career, I never envisioned a company of this size, but then I never envisioned a company capable of generating more than $100bn in free cash flow in a year. When you look at the underlying metrics, it’s understandable why Apple has done so well.”
Apple’s success has led to an increased debate over its valuation. At 28 times projected earnings, the stock is trading at a premium to its own history and the market, according to data compiled by Bloomberg. This is particularly noteworthy for a technology firm whose revenue is expected to shrink this year.
Apple briefly rose above $3tn in early 2022 but failed to close above that level, marking the start of a downtrend that resulted in a 27% drop that year as investors fled from tech stocks amid soaring interest rates. If Apple achieves the milestone this time around, it will be the first company to do so. At $2.76tn, Apple is currently bigger than the entire Russell 2000 index.
This year, Apple and other technology behemoths have been market standouts as investors gravitate towards companies with the biggest scale while facing potential risks from a potential recession, bank failures, and now a US debt-ceiling standoff. However, the impressive performance of these tech giants has also raised concerns about their impact on the overall market.
Despite these concerns, Apple’s underlying metrics and steady revenue stream continue to attract investors. As Burton noted, “When you look at the underlying metrics, it’s understandable why Apple has done so well.” With the company’s market value inching closer to $3tn, it remains to be seen whether Apple can sustain its impressive performance in the long run.
