Apple’s $1trn market cap: “nothing unusual” for Smith & Williamson

The market capitalisation of Apple Inc has reached the $1trn (€860m) threshold on 2 August 2018, making the company the world’s first public traded company worth $1trn.

Established in 1976, Apple sees its market value exceeding the combined market caps of Exxon Mobil, Procter & Gamble and AT&T and accounts for 4% of the S&P 500 as noted by Reuters.

Reacting to the news, Smith & Williamson’s partner Chris Ford, also  co-portfolio manager of the firm’s Artificial Intelligence fund, said : “If one compares the present day to history, it is clear that we are in an era where huge companies are not unusual, with no one standout company that dwarfs all others.

“Just over 50 years ago, in the late 1960s, the picture was very different. In 1967, for example, the largest company in the US market was IBM – still a corporate bellwether today. But it was over five times the size of the tenth largest company – Gulf Oil – which was worth around $58bn. Apple, Alphabet and Amazon are undoubtedly behemoths but they do not dwarf the likes of JP Morgan Chase and Johnson & Johnson, which also appear in today’s US (and global) top ten.”

Ford argued regulators may fret about the influence of megacaps like Apple and Amazon whereas their size is nothing unusual as he recalled that back in 1917, the largest US company – US Steel – was ten times larger than the tenth largest.

Smith & Williamson’s partner suggested that the success of the current megacaps dwells in their deep embedding in individuals’ daily lives.

“Phones are not just phones – they are intelligent devices – and they are about to become more intelligent due to the power of AI,” said Ford.

“As history has shown, few companies can embed themselves in such a way for the long term, and the future winners in 50 years’ time may look very different to those we have now. But what is clear is that businesses are using AI to consolidate what are already strong positions within their existing markets, and these are unlikely to be overtaken any time soon,” he added.

Adrien Paredes-Vanheule
Adrien Paredes-Vanheule is deputy editor and French-Speaking Europe Correspondent for InvestmentEurope, covering France, Belgium, Geneva and Monaco. Prior to joining InvestmentEurope, he spent almost five years writing for various publications in Monaco, primarily as a criminal and financial court reporter. Before that, he worked for newspapers and radio stations in France, in particular in Lyon.

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