Is Apple market cap rise justifiable?

Question

I am trying to understand from $1T market cap of Apple jumped to $2.29T during last 6 months of pandemic.Apple revenue is $260bn and net income ~$55bn, in third quarter of 2020 they had revenue increase of 11% from the year-ago quarter.What is justification of additional 1,29 trillion (1,290,000,000,000 USD) in 6 months?Entire world economy is just $86 trillion?!

handmodel · Accepted Answer

First off, the 86T figure is the yearly GDP of the world whereas the 2T figure for Apple is the value they are worth to shareholders in perpetuity. Not directly comparable.
I would say the rise itself isn't logical but that doesn't mean it is overvalued now - perhaps it was undervalued before. The P/E ratio is 40. That is high but not crazy high if you think they can expand their profits from services and continue to expand to new countries like India. Additionally, they have so much cash and a business moat that even if things don't go well it is unlikely the value of the company could drop too far.
I will continue to hold my stock for now.

nabla9 · Answer

Look at their p/e and compare it to alternative investments. Over- and undervaluation depends on the return investors expect.Investors are increasingly happy with smaller ROI and Apple is good relative to alternatives. Money is moving from bad companies to good companies, decreasing the ROI from good companies.

cblconfederate · Answer

Big tech market caps are a gambling game these months. There is an influx of foreign investors to the US who are gambling on tech stocks. Has nothing to do with their revenues, but it's a good rationalization. Investors would be foolish not to join the Fed-propped US stock rally. But they also have no loyalty to the companies so, when it will pop is anybody's guess.https://www.investopedia.com/the-biggest-u-s-stock-buyer-in-...

samfisher83 · Answer

http://financials.morningstar.com/valuation/price-ratio.html...Their price/sales and price/earning have just jumped like crazy. Their peak year in term of phone sales was 2015.

hindsightbias · Answer

It&rsquo;s one of those rare companies that actually makes real money.What other stocks that arent monopolies are worth investing in? There are trillions in cash sloshing around and for every anecdote there are a thousand other stocks that are crap.

swiley · Answer

Yes.Apple ultimately controls all of the apps on your phone. They control when people get dates, when they get jobs, if/when they can spend money, many people won&rsquo;t even go to the bathroom without their phone.Is it right? No. But it&rsquo;s the way it is.

Is Apple market cap rise justifiable?

http://financials.morningstar.com/valuation/price-ratio.html...
Their price/sales and price/earning have just jumped like crazy. Their peak year in term of phone sales was 2015.

It’s one of those rare companies that actually makes real money.
What other stocks that arent monopolies are worth investing in? There are trillions in cash sloshing around and for every anecdote there are a thousand other stocks that are crap.

Yes.
Apple ultimately controls all of the apps on your phone. They control when people get dates, when they get jobs, if/when they can spend money, many people won’t even go to the bathroom without their phone.
Is it right? No. But it’s the way it is.