By Daniel Betancourt/ OptionsSwing Inc
Seemed like just two years ago, Apple’s market cap was $1 trillion. Well that is because it was; two years later, it has doubled its valuation under Tim Cook’s wing.
Table of Contents
America’s most valuable company:
Apple
It was a close race between Apple, Microsoft and Amazon; but in the end, the creative took the gold. What a milestone for Tim Cook, as the successor for Steve Jobs, to bring Apple this far in such little time. The creative minds behind Apple’s “think different” slogan have made them what they are today, different. Apple has added $420 billion to its market cap since its stock split announcement just three weeks ago. The investors have been pouring in and do not expect them to stop, this buying frenzy will most likely continue into and after the split. A certain FOMO ( fear of missing out) will drive this stock rally even further now that the S&P has recovered all of its Covid crash losses and some more.
Apple going forward from here
There is this prestigious feeling you get when you are able to send that blue iMessage that you just do not get from the green text messages. This prestige feeling you get when owning an Apple product is what makes them a global icon and makes them the brand of choice for corporate offices. The detail in the design and research that they put behind their products that are done to best understand customer needs and requirements sets them apart from from the flock; user friendly design for various industries keeps the Apple products in front of the faces of the creative artist, engineers, architects, graphic designers and stock traders.
With a prestigious feeling comes a prestigious price. It is no secret that Apple products can be presented as a Luxury and therefore are priced in that manner. Consumer spending is at a record high at the moment but this is due to the stimulus and unemployment benefits that citizens have been receiving; what will happen once there is no more stimulus and no jobs to go back to once unemployment benefits run out? Definitely something to watch for in the third quarter when Apple reports earnings. Not only that, but with President Trump looking deeper into the ban of Chinese companies, Apple can take a hard hit from this. Let’s say WeChat is removed from the App Store; China’s citizens heavily rely on this app to share pictures, make mobile payments and text family and friends. With more than 1 billion app users, iPhones will seem much less appealing to Chinese consumers.
The Bottom Line
Apple, along with the market, is very strong. We are very well in a “buy the dip” market and as we continue to melt-up, the more illogical this market seems. Analysts have been calling a top since the beginning of this V-shape recovery and we understand why; but statistically speaking, playing the upside has been far more rewarding than betting against it. Tread lightly, bears… tread lightly.
