Beautiful Virgin Islands

Wednesday, Sep 03, 2025

Is Apple really worth $3 trillion and what's its secret?

Is Apple really worth $3 trillion and what's its secret?

Investors bet the iPhone maker will keep launching best-selling products as it explores new markets such as automated cars and virtual reality.
Apple had a stunning start to 2022 when it briefly became the first company to touch a $3 trillion (€2.6 trillion) market value on Monday before closing the day just short of the mark.

It comes as investors bet the iPhone maker will keep launching best-selling products as it explores new markets such as automated cars and virtual reality.

But is the tech giant really worth $3 trillion (€2.6 trillion) 16 months after becoming the first company valued at $2 trillion (almost €1.8 trillion)?

The answer depends on how one views the iPhone maker's ability to keep up the unprecedented growth of the past 15 years.

In its last fiscal year which ended September 25, Apple delivered 33 per cent revenue growth to $365.8 billion (€323 billion) thanks to strong demand for 5G iPhone upgrades.

But that growth spurt came after a year of single-digit sales growth and the 2019 fiscal year when Apple's sales declined.
Apple's new technologies

The bull case for Apple is that it has built an ecosystem of a billion iPhone owners who spend money on services and that it is well-positioned for future categories like self-driving cars and augmented reality.

The deep discount investors once ascribed to Apple's stock because of its dependence on the iPhone for sales growth has disappeared as Apple has proved that the device sits at the centre of an expanding solar system that adds new gadgets like the Apple Watch and Apple AirTags and new, paid services like television and fitness classes.

"Apple has been and still is an incredible growth story anchored by must-have products and a growing portfolio of services. While years ago the stock price was a value investor's dream, I don’t think the current near-record high price should be a sell signal for long-term focused investors," said Trip Miller, managing partner at Gullane Capital Partners.

Moreover, Apple is trading at about 30 times its expected 12-month earnings, down a bit from a multiple of 32 in early 2021 but still at highs not seen since 2008, according to Refinitiv data.

Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Apple has been a "safety stock" through the pandemic and that investors are likely expecting solid holiday sales.
Apple car

Apple "seems to be vaccinated against anything that Omicron can throw at it," Eddins said. "I’m not complacent at this level, but there would have to be some nasty unforeseen events to rock the boat".

Some analysts believe Apple has plenty of room to grow in the coming years, with future products such as the Apple Car.

"We see the prospects of Apple Car - representing the clearest path to doubling Apple's revenue and market cap - catalysing a shift in investor narrative back toward the attractiveness of the platform (1 billion loyal customers) and long-term, sustainable growth," Morgan Stanley analyst Katy L Huberty wrote in November.
No Guarantees

The bear case, however, is that Apple is hitting the limits of how much it can grow its user base and how much cash it can squeeze from each user, with no guarantees that future product categories will prove as lucrative as the iPhone.

In a December note to investors, Bernstein analyst Toni Sacconaghi warned that Apple's prospects in the augmented and virtual reality category are bright but likely to account for only 4 per cent of its revenue by 2030.

Moreover, the entire market for those devices is not likely to be near the billion-unit mark until 2040, he wrote.

Sacconaghi also saw "no obvious catalysts for multiple expansion" in Apple's stock "given slower expected growth" in the next fiscal year. He has a market perform rating on the stock.

Another concern is uncertainty over Apple's ability to lock in the same profits for paid services on its future hardware. Its App Store business model, which takes commissions on in-app purchases of digital goods, has been targeted by proposed legislation in the United States and Europe.

To be sure, one of the primary drivers of Apple's ballooning valuation is the goal it set in 2018 to get what at the time was nearly $100 billion (€88 billion) in net cash off its balance sheet and become net-cash neutral.

That goal, for which Apple never specified a deadline, has been tough to meet because it simply keeps making money. Apple generated $104 billion (around €92 billion) in cash from operations in fiscal 2021 and returned $106.5 billion ( (almost €94 billion) to shareholders. But its net cash remained at $66 billion (€58 billion) at the fiscal year's end.

With big acquisitions largely out of the question under current US antitrust regulators, Apple has had few options but to shovel cash back to shareholders, said Tom Plumb, founder of Wisconsin Capital Management and an Apple shareholder.

"They're fighting the fact they've got $100 billion [€88.5 billion] of cash flow a year," Plumb said. "You can't bet against a company that has this type of cash flow".
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
Pickles are the latest craze among Generation Z in the United States.
Deadline Day Delivers Record £125m Isak Move and Donnarumma to City
Nestlé Removes CEO Laurent Freixe Following Undisclosed Relationship with Subordinate
Giuliani Seriously Injured in Accident – Trump to Award Him the Presidential Medal of Freedom
EU is getting aggressive: Four AfD Candidates Die Unexpectedly Ahead of North Rhine-Westphalia Local Elections
Lula and Putin Hold Strategic BRICS Discussions Ahead of Trump–Putin Summit
WhatsApp is rolling out a feature that looks a lot like Telegram.
Investigations Reveal Rise in ‘Sex-for-Rent’ Listings Across Canada Exploiting Vulnerable Tenants
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
Israeli Airstrike in Yemen Kills Houthi Prime Minister
Ukrainian Nationalist Politician Andriy Parubiy Assassinated in Lviv
Corporate America Cuts Middle Management as Bosses Take On Triple the Workload
Parents Sue OpenAI After Teen’s Death, Alleging ChatGPT Encouraged Suicide
Amazon Faces Lawsuit Over 'Buy' Label on Digital Streaming Content
Federal Reserve Independence Questioned Amid Trump’s Push to Reshape Central Bank
British Politics Faces Tumultuous Autumn After Summer of Rebellions and Rising Farage Momentum
US Appeals Court Rules Against Most Trump-Era Tariffs
UK Sought Broad Access to Apple Users’ Data, Court Filing Reveals
UK Bank Shares Dive Over Potential Tax on Sector
Germany’s Auto Industry Sheds 51,500 Jobs in First Half of 2025 Amid Deepening Crisis
Bruce Willis Relocated Due to Advanced Dementia
×