Let’s assume for a moment that you or I owned a company worth $1.9 trillion: the market capitalization of Apple (NASDAQ:AAPL). Wow! But hey, billion, trillion, what’s the diff? Where AAPL stock is concerned, you’d best do your math and bring along the best stopwatch of all time.
Giving away $10 a second, $1.9 billion will last you 6 years. But $1.9 trillion? Try 6,025 years, which in time machine terms puts us at the dawn of horse domestication and written history.
It’s hard to believe the House That Steve Jobs built has grown this gargantuan, especially considering that it only (only?) passed the $1 trillion mark in 2018. AAPL stock devotees no doubt find this thrilling, though the ones who double as tech geeks (including yours truly) view it as bittersweet.
After Jobs passed in 2011, Apple ceased to be an innovator of cool, fun, eye-popping products that changed our lives. Every year since has brought a new iPhone, a ho-hum Apple Watch and nothing else revolutionary, really.
But legacy companies can generate legendary returns and in the case of AAPL stock, investors have had all the cause they need to take bite after juicy bite. Heretofore I’ve been skeptical: As a consumer, I’m not about to change iPhones like iUndies and can’t imagine how Apple keeps making money in an overcrowded smartphone market. But iAm willing to reconsider how iLook at things, with a fresh “i” of course.
AAPL Stock: The “i”s Have It
In the nanosecond attention-span fishbowl that is consumer America (and in fact the globe), products that consistently reboot with minimally viable improvements often get shunned. In fact, AAPL stock had to outflank some very high-profile misses: from removing the smartphone headphone jack starting with its iPhone 7 in 2018, to cranking out MacBook Pros with wafer-thin butterfly-switch keys prone to shattering.
It finally switched back to the old-school scissor-switch keys this year but not without “hurting its image and causing wholly unnecessary hassle and cost for its customers,” The Verge’s Dieter Bohn opined.
Still, it’s as though AAPL stock exists in some alternate universe where marketplace gaffes simply don’t stick. Besides essentially doubling its market cap in two years, Apple has seen its stock surge 292% over five years, with just two brief dips along the way in 2018 and 2020 — the latter attributable to the novel coronavirus.
Under current CEO Tim Cook, AAPL stock even re-introduced a quarterly dividend in 2012, currently 20.5 cents following a 4-for-1 stock split in August. Where is Apple making all its money? For starters, Covid-19 has forced an overwhelming number of people to work from home, and in the process up their laptop and desktop game.
The Records Keep Coming
For its fiscal fourth quarter 2020 ending Sept. 26, Apple set all-time records for Mac revenue and services. In conjunction with the Q4 earnings report, CFO Luca Maestri noted that Apple finished its fiscal year “with new all-time records for revenue, earnings per share and free cash flow.”
And yes, a flash of long hoped-for innovation has finally arrived, though Apple can’t say it originated at its Cupertino, Calif. campus. The new iPhone 12s are equipped to handle 5G technology, making older models look like tin cans on a string where speed is concerned. Just as trillion sounds like billion but ain’t even close, 5G outruns 4G by terraleaps and gigabounds, if you will.
Meanwhile, Wall Street analysts aren’t about to wake us up from the dreamy performance of AAPL stock, with 21 out of 39 calling it a buy. That vote of confidence only cements the case for Apple as a stock to buy, own and hold for years and years to come. It’s a rock to build your portfolio on at this point and while I can see increased smartphone competition hurting it worldwide, I said the same thing five years ago and it hasn’t come to pass.
Behold, the Apple of Your “i”
The only reasons not to invest in AAPL stock, as I see them, have more to do with portfolio mix and allocation. One can’t buy every attractive stock — unless, of course, you’re sitting on $1.9 trillion — and if your portfolio feels right and performs well after years of road testing and refinement, it’s best not to tinker with it.
That said, an investment in Apple should never be far from consideration. If you’re worried about the future, consider that Apple has all the mega-muscle it needs to pounce on the burgeoning market for entertainment streaming — and already has some sizable stakes planted.
My InvestorPlace colleague Dana Blankenhorn characterizes the landscape thus: “While stars and shows may be worth millions, Apple has trillions. Apple TV+ was launched with a $6 billion budget. Apple can outbid anyone for talent. It can also be patient,” what with a bargain-basement price of $5 per month.
What more needs be said? Maybe this: Apple remains a beloved brand with more history than even its most outsized tech competitors, except for Microsoft (NASDAQ:MSFT). May AAPL stock supply you with all the investment fruit you need for years and likely decades to come.
On the date of publication, Lou Carlozo did not have (either directly or indirectly) any positions in the securities mentioned in this article.
