NEW YORK (AP) — Apple, already the world’s most valuable company, hit the $600
billion level for the first time Tuesday.
Only
one other company has been worth $600 billion — Apple’s old sparring
partner Microsoft Corp. It reached that valuation for 13 trading days
around the turn of the millennium, at the peak of the technology stock
mania.
At its highest level, on Dec. 30, 1999, Microsoft’s valuation was $619 billion. It’s
now worth $260 billion.
General Electric Co. came just short of reaching a $600 billion valuation in August
2000.
Apple
shares hit $644 in morning trading, up 1.2 percent from Monday’s close.
At that price, the entire company is worth $600.4 billion. By midday,
the shares had retreated to $638.64, up 0.4 percent from the day before,
putting the value below $600 billion again.
Apple’s stock is up
59 percent since the start of the year, an indication that investors are
catching up to what analysts have been saying for a while: despite its
enormous market capitalization, Apple’s stock has been undervalued
relative to its even more enormous profits.
The rally has also
been fueled by the report of another blow-out holiday quarter, and the
announcement that Apple will start putting its $97.6 billion cash hoard
to use this summer by paying a dividend and buying back shares.
Apple’s
market capitalization hit $500 billion on Feb. 29. That, in itself, was
a rare achievement: only five other U.S. companies have ever been worth
that much.
Apple’s market capitalization is still 41 percent
below Microsoft’s 1999 record if inflation is taken into account. The
$619 billion then becomes $846 billion.
Many analysts think Apple
can get there, though. Last week, Brian White of Topeka Capital Markets
was the first to set a stock price target of more than $800, with a goal
of $1,001. That target implies a market capitalization of $932 billion.
White
believes Apple will expand its reach this year by starting to sell the
iPhone through China Mobile, that country’s largest phone company, and
by launching a TV set. Apple hasn’t confirmed either piece of
speculation.
In a rare contrarian opinion, BTIG Research analyst
Walter Piecyk downgraded Apple from "Buy" to "Hold" on Monday,
saying
its profit margins are unsustainable. Phone companies are seeing the
profits sapped by the subsidies they pay for the iPhone, he notes, and
are set to curb their upgrade policies and otherwise make it harder for
people to trade up to the newest model. That effect will hardly be
visible when Apple reports results for the most recent quarter in two
weeks, Piecyk believes, but he said it will become more apparent later
this year.
China’s largest oil company, PetroChina, was briefly
worth $1 trillion after it listed on the Shanghai stock exchange in
2007, but only based on its price on that exchange. Its shares also
trade in Hong Kong and on the New York Stock Exchange. Based on trading
there, its market capitalization has never reached $500 billion.
Copyright 2012 The Associated Press.