Apple Hits $2 Trillion 💰

It took Apple thirty years to earn its first trillion dollars in market value. It took Apple five months to amass its second trillion. The bigger you get, the hard it’s supposed to be to continue scaling at pace, but this tech giant isn’t playing by those rules. Its valuation is insane relative to any measure in its history, and here’s the reason investors continue buying!

If you ask a long-term Apple shareholder what they like about this stock, it’s the safety. Apple is loaded with cash. It’s an awesome business with 40% gross margins on iPhones, and 60% gross margins on other services. Tim Cook is among the most competent CEOs in the world, just look at how he’s handled the situation with Trump and China. Brilliant!

However, the cash is also controversial. It’s been used to fund buybacks in recent years which have put Apple’s stock performance on steroids, but are just an admission that there’s nothing else to do with the cash. Apple should be looking for a second act following the iPhone!

We don’t see huge inflows into other stocks hoarding cash, like Berkshire Hathaway or Facebook, and that’s because it’s not a productive use of earnings. If Apple invested in research and development (R&D) to innovate new products, or splashed out on a mega-acquisition, then that could justify its valuation, but this market would seemingly punish it?

How are you trading Apple at these dizzying heights?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Originally published at on August 20, 2020.