Apple stock hits $3 trillion market cap; here’s what $4 trillion looks like

Posted: 4 January 2022 10:30 am
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Strong sales on all fronts and upcoming Apple Glasses are key drivers of the company's strong growth, which analysts expect to continue.

Apple (AAPL) stock hit US$182.84 today to break US$3 trillion in market capitalisation — the first company to do so.

Shares of Apple briefly reached that mark during intraday trading Monday afternoon before falling back shortly afterward. They closed the day at US$182.01.

These levels mean Apple has tripled its valuation in just over three years. So, is there upside left to take this stock to US$4 trillion? Several analysts seem to think so.

Apple's market cap is growing exponentially

In similar fashion, Apple became the first publicly traded US company to hit a US$1 trillion market cap during intraday trading on Aug 2, 2018. The stock rose to a share price of US$207.05 based on an outstanding share count of 4,829,926,000. This was 38 years after the company went public.

The company hit US$2 trillion just over two years later on Aug 19, 2020. It was, again, the first company to reach a US$2 trillion market cap.

Since hitting the US$1 trillion mark in 2018, it's been taking Apple a little more than a year to add each additional US$1 trillion to its market cap.

So at what stock price does it hit US$4 trillion?

If the number of outstanding shares remains the same, Apple would need to reach a share price of US$243.76 to break the US$4 trillion mark. That's a one-third gain.

Analyst sentiment is bullish on Apple. The company is rated a Buy, but analysts have an average price target of only US$175.76. The highest price target is US$210, still shy of the US$243.76 needed to surpass the US$4 trillion mark.

But analysts' price targets aren't always accurate, and Apple has a history of outperforming. At current growth rates, Apple could hit US$4 trillion in 2022 or 2023.

Key drivers for growth in 2022

In the 12 months ended Sep 25, 2021, Apple saw an increase in net sales of over 33% from the same period last year. iPhone sales were up 39%, while Mac, iPad and wearables, home products and accessories were up 23%, 34% and 25%, respectively.

The tech giant's services business, which includes Apple TV Plus, Apple Music and Apple Fitness Plus, is also growing as a percentage of Apple's total business. Its services grew 27% year-over-year, setting an all-time revenue record of US$68.4 billion in 2021.

Apple is seeing continued growth on all fronts. But since more than half of Apple's revenue comes from iPhone sales, dwindling sales could slow its march to US$4 trillion.

Apple's augmented reality glasses are also slated for a possible end-of-2022 release, according to some analysts, which could drive the stock — and market cap — even higher.

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At the time of publication, Matt Miczulski did not own shares of Apple.

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