If you’re wondering what the recent valuation means, you’re not alone. The number doesn’t directly relate to sales, assets, or anything tangible. Let’s examine the news in greater detail and discuss what Apple’s $3 trillion market cap actually means.
What Does Apple’s Market Cap Mean?
Market capitalization—or market cap—derives from a company’s shares. To arrive at a valuation, you simply need to multiply the number of existing shares by the current share price. In Apple’s case, the figure comes out at around $3 trillion.
BBC News reports that the company was also the first ever to hit a $1 trillion market cap in August 2018 and has since continued its rapid growth. Apple hit the $2 trillion mark two years later in August 2020. It then reached the market value of $3 trillion in a little over 16 months, after a record-breaking first quarter in 2021.
Apple’s rapid growth period falls within the pandemic, when demand for technology has been particularly high. Global catastrophes are great for big business. However, seeing how certain companies fare once the dust settles and COVID becomes a distant memory will be interesting.
What Does Apple’s Market Cap Mean for the Future?
Apple’s $3 trillion market cap is a momentous achievement, and watching the company grow, diversify, and innovate has been fascinating. The next question must be: what will Apple do next?
Eventually hitting a $4 trillion market cap is no doubt an important goal. But the company will need to offer new and exciting products if it hopes to maintain its forward momentum. Apple can’t nourish itself on iPhone sales alone.
Whatever the future holds, the company will no doubt seek to surprise us with its next generation of products as it chases that $4 trillion target.
