Market capitalization is the way the investment community says how much a company’s total value is. In general, it is calculated by the number of shares outstanding that trade multiplied by the price per share. Some of the most valuable companies have doubled in value in the past three years, in part because the general market has surged so much. The value of the S&P 500 has doubled since the pandemic bottom of set on March 23, 2020.
The first company ever to pass the $1 trillion market cap level was Apple, on August 2, 2018. Since then, that number is up by well over 100% to $2.45 billion. Four other companies currently have market caps above $1 trillion. Microsoft is at $2.29 trillion, Alphabet (owner of Google and YouTube) is at $1.84 trillion, Amazon is at $1.62 trillion and Facebook is at $1.03 trillion. The value of these companies has made some of their founders among the richest people in the world. Most notable among them are Jeff Bezos of Amazon and Mark Zuckerberg of Facebook.
Apple has become among the largest companies in the world. Last quarter, it had revenue of $81.4 billion. It is among the most profitable, with net income of $21.7 billion. Apple also holds marketable securities of $132 billion. When Apple announced the numbers, Luca Maestri, Apple’s chief financial officer, commented:
Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices.
Apple does not announce unit sales by product line, as it once did. However, the consensus among analysts is that the iPhone is by far the largest contributor to revenue. In 2021, Apple may sell as many as 250 million iPhones. This should be boosted by the release of what probably will be called the iPhone 13. It is expected to be released around the third week in September. That period on the calendar is an Apple tradition for releases of major new products.