First things first, Apple’s quarterly earnings call is scheduled for this afternoon at 2p PT / 5p ET.
The tension here, as it usually is, is the balance between past sales and future projections.
Now on to the race to $1 trillion. This is all about market capitalization, or market cap, for short. Market cap is a company’s share price times the number of shares outstanding. Here’s an Investopedia article on the concept.
As of this writing, Apple’s market cap is $860B. That’s based on a price to earning ratio of 18.25. That P/E ratio is on the high end of middling, certainly a reasonable number.
Amazon’s market cap is $696B, with a P/E ratio of 364.98. Yes, you read that correctly. In effect, Apple’s stock is grounded in actual results, while Amazon’s stock is more of a flier, based on growth and the thinking that Amazon is going to eat the world.
And Alphabet? Hot on Apple’s tail with a market cap of $811B and a P/E of 39.09. Right in the middle.
Who will get to $1 trillion first? Might happen this year.
Want to check these numbers for yourself? Go to Google and type “Apple’s market cap” or just “AAPL” and Google will show the relevant details.
Amazon’s PE is effectively null. Division by zero. They manage a token profit most quarters, but their entire model is to sacrifice all profit for growth. “Their margin is our opportunity.” They have essentially hacked the market.
Google has become a behemoth by selling out the entire concept of privacy. They had one great idea – the first good search engine – but have become a vast monopoly on the basis of a single massive arbitration play: corporations value your data more than you do. Google “buys” it from you and sells it to them.
Facebook – see Google. (Except with a different one great idea).
Apple on the other hand designs devices people love; has revolutionized computing multiple times; respects privacy, security and user experience as primary aspects of its business model, with environmental impact and employee well-being not far behind. It makes the favored products of the majority of high-end buyers in almost every segment it competes in. And its shares are by far the cheapest to buy.
This is why one of these companies represents about 95% of our (modest) direct stock ownership, and the others none.
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