Apple recently became the first US company to reach a $2 Trillion market cap. To put that into perspective, that’s larger than Italy’s GDP. It took Apple 42 years to breach the $1 trillion mark. But, then it took the company just two more years to get to $2 Trillion.
What’s even more amazing is that the entire second $1 Trillion was actually generated over the last 21 weeks. So, if you had invested in Apple 21 weeks ago, you would have doubled your investment by now. These are some amazing statistics.
Apple’s rise to $2 Trillion is interesting because the company has arguable not done a lot of new things over the past two years. The iPhone, the company’s best performing invention, has become the cash-generating machine.
This has been backed by the diversification of its revenue streams via the growing focus of the company on its services business.
Apple talked about plans to launch various subscriptions later this year to move away from relying completely on hardware.
It’s not just Apple though, over the last few months investors have poured billions into the large technology companies (popularly known as FAAMG), betting that they would continue to grow despite the COVID pandemic. Combined, the value of these companies has grown by almost $3 Trillion since March.
This is the same as the growth in the value of the S&P 500’s next 50 most valuable companies combined. Investors believe that these large digital and cash-rich companies will come out of the pandemic even stronger than they were earlier.
Looking at the value creation by these companies begs the question – can the Indian investor afford to be left out of the next Trillion that Apple might add or even the creation of the next Apple or Microsoft? Not anymore.
Earlier one had the excuse that there are no easy options available to them to be able to invest in these companies.
But, in today’s technology age one can open a brokerage account in the US and own Apple shares in a manner that was never possible before.
Apple’s latest milestone is a good reminder for Indian investors to start looking beyond the local markets for wealth creation opportunities and start thinking like global investors!
(Viram Shah, CEO, and Co-Founder, Vested Finance)
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