“Apple’s unique performance is not the sign of a bubble”

Lhe story may remember this Monday, January 3, 7 p.m. in New York. For the first time a company has broken the ceiling of 3 trillion dollars (approximately 2,655 billion euros) of stock market valuation. Apple is now worth more than the gross domestic product of France or the UK. The firm with the apple is accustomed to touching the high altitudes. In 2018, it was the first to pass the 1,000 billion mark and in 2020, that of 2,000. A progression that says just as much about the tremendous growth of the American stock market as it does about the exceptional history of this company.

Read also Article reserved for our subscribers Apple and Gafams, new safe havens for investors

When, on October 5, 2011, the founder, Steve Jobs, died of pancreatic cancer, few observers bet on the longevity of his successor, the lackluster Tim Cook. Engineer specializing in supply chains, he has nothing of the flamboyance and the boundless imagination of the creator of Macs, iPods, iPads and other iPhones. It only remained for him to properly manage the master’s inheritance. At this time, the company is worth 380 billion dollars and believes itself at the top.

The bet of the transition

Pale Mr. Cook has denied all prejudices, even the adage that trees do not rise to the sky. He was able to manage the maturing of the iPhone in a high-end market in the process of saturation. Despite the logistical concerns, the thirteenth version of his phone sold very well and, above all, he won the bet of the transition to services. Seven hundred and fifty million people subscribe to one of its music, video, fitness or finance services.

Read also Article reserved for our subscribers “Apple played off the Covid-19 pandemic and the US-Chinese trade dispute”

Admittedly, these still only represent 20% of its sales, but it’s still $ 70 billion, with a profit margin that would approach, according to analysts, 70%. In addition, its many accessories, headphones or connected watches are now selling more than computers or tablets. Surprisingly, in the folded and anti-American China of 2021, its turnover jumped 70%.

If we compare its earnings ratio to its stock market price, the company is valued 30 times its profits, while Amazon is worth 80 times its profits and Tesla 173

Paradoxically, this unique performance – its main competitor, Samsung, is worth almost eight times less than it on the stock market – is not the sign of a bubble. In any case, if we compare its profit ratio to its stock market price, the company is valued 30 times its profits, while Amazon is worth 80 times its profits and Tesla 173. Apple is only an extremely well managed company, which has has been able to attract and keep in its ecosystem people willing to pay twice as much as its competitors. In addition, as it is not dominant in its market, overtaken by Samsung, it is less afraid of the wrath of competition authorities, if not on its application store.

You have 12.74% of this article left to read. The rest is for subscribers only.