It is widely expected that Apple (AAPL) will introduce the iPhone 5 on September 12, 2012. Traditionally Apple stock runs higher into a major product launch. However, this time iPhone 5 frenzy has turned into a full-fledged mania. Adding fuel to the fire is speculation that the mini iPad will also be announced on the same day.
What is Tim cooking up?
Yesterday Apple stock broke out to an all time high. Based on the number of shares outstanding, this price calculates a market cap of $623.5 billion. Apple just beat the market cap record set by Microsoft (MSFT) on December 30, 1999 of $618.9 billion.
On an inflation adjusted basis, Microsoft’s record still reigns supreme. Apple’s market cap will have to exceed $842.5 billion to beat Microsoft on an inflation adjusted basis.
Apple’s meteoric rise is quite a phenomena when one considers that the market cap of the second biggest company Exxon Mobil (XOM) is $406 billion.
The difference between the first place company Apple and the second place company Exxon by market cap is $217.5 billion. How big is this difference? It is so big that 98% of S&P 500 constituents have a lesser market cap than this amount.
Google (GOOG) is Apple’s main competitor. Its market cap is near $220.9 billion. The market cap of Samsung is $157.8 billion.
It was not long ago that analysts were concerned about the law of large numbers. Now everyone has become oblivious to the concern. Apple mania is in full swing. Astute investors will enjoy the party but keep an eye on the exit.
About Me: I am an engineer and nuclear physicist by background. I founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Write me: Nigam@TheAroraReport.com. Follow me here and get email notification when I publish a new article.
Full disclosure: Subscribers to The Arora Report are long Apple from $131 and have taken partial profits at $360, $525, $629 and $568.
