Apple Is No Longer the Most Expensive Company in the World

 

Apple cost more than a trillion dollars in September. But now, it costs only $700 billion.

On August 1, 2018, Apple published a financial report that turned out to be better than analysts had predicted, and the Company had risen in price to a trillion dollars for the first time in its history. At that time one share of the Corporation cost $207, but investors did not even think about stopping: they raised the value of its share up to $232 by the end of September.

Since then, Apple shares have been falling steadily. In late November, the iPhone manufacturer cost $812 billion, and it was superseded by Microsoft, the most expensive company in the world. At the beginning of 2019, Apple’s capitalization fell down to $700 billion, and Apple let Amazon and Alphabet (Google) take the lead.

There are many reasons for the fall in Apple shares including those ones that the Company could not affect.

The main reasons are as follows:

1. Too sharp growth in shares in previous quarters. It was like a “bubble” that was supposed to burst.

2. A US trade war with China. Most Apple products are produced in China – it means that they can be included in the list of goods subject to additional sanctions at any time.

3. US dollar strengthening. The higher the USD value, the less (in USD) Apple gets on sales abroad.

4. The slowdown in the Chinese economy growth. This reduces the demand for Apple products.

Yes, Apple shares fell down by a third, but most analysts are confident that the Company will be all right. It still has a huge safety cushion of funds earned in previous years (more than $200 billion), and it still generates a profit.

49% of analysts still recommend buying Apple shares, the remaining 51% recommend holding existing ones, and no one recommend selling them. This may be low figures for Apple (63% of analysts recommended buying Apple shares in August), but in general this means that there is no need to fear a further fall in the long run.