The company’s share price has risen by 83% in the past year, and by almost 50% so far in 2012. Apple is now easily the largest company in the world by market capitalisation, at some $565 billion. It looms over Exxon Mobil, which is worth a mere $408 billion. Since the start of this year it has added $187 billion to its valuation, roughly equivalent to the entire market caps of companies like Procter & Gamble, Johnson & Johnson and Wells Fargo. Apple is larger than the American retail sector combined.
It accounts for 4.5% of the S&P 500 and 1.1% of the global equity market (see chart 1). Some bank analysts have started to report America’s corporate earnings without Apple, because including the firm so skews results. Fourth-quarter earnings are expected to have risen by 6.7% from the prior year for companies in the S&P 500, but by a much more modest 3.6% if Apple is excluded, according to UBS.
Around a third of all hedge funds own it, including big names like SAC Capital and Greenlight. Some have made very big bets. Citadel’s $5.1 billion stake in Apple (as of December 31st) accounted for around 12% of its equity portfolio. Many hedge funds that have done well in the past year owe much to this single position.
The stock’s gains this year have not only boosted the spirits of shareholders but also brightened the whole equity market. Apple is responsible for more than 10% of the S&P 500’s rise this year (see chart 2), and for 39% of the NASDAQ 100’s gains. No other stock has ever grown to have such a significant impact on an index so quickly, says Howard Silverblatt of Standard & Poor’s, a ratings agency.
The share price keeps soaring. On March 20th, a day after Apple announced it would use some of its cash hoard (estimated at $97.6 billion at the end of 2011) on a quarterly dividend and a $10 billion share buy-back, its shares closed at a record high of $605.96. This is the first time in 17 years that Apple will pay a dividend. Dividend funds, which had not considered investing in Apple before, could pile in, potentially pushing the price higher still.
