Shares are up 35% this year, adding nearly $690 billion to market capitalization
BLOOMBERG – The period of continuous increases of apple in 2023 brought the company back to the verge of a historic threshold: a market valuation of US$ 3 trillion (about R$ 14.9 trillion). The stock is up 35% this year, adding nearly $690 billion to market value, as investors flock to the automaker’s steady revenue and huge cash flows. iphone. The advance brought Apple very close to his record of January 2022, when it reached 3 trillion dollars.
“In my career, I never imagined a company this size, but I never imagined a company capable of generating more than $100 billion in free cash flow in a year,” said Patrick Burton, portfolio manager of MainStay Winslow Large Cap Growth Fund. , which owns nearly 4.5 million shares of the Cupertino, California-based company, according to the latest data. “When you look at the underlying metrics, it’s understandable why Apple has done so well.”
That commitment to shareholder returns, coupled with the company’s durable revenue streams, made Apple and other tech “megacap” stocks a favored security play earlier this year, as the slump in Silicon Valley Bank led to turmoil in the banking sector. But now, between the expectations that the Federal reserve (the US central bank) starts cutting interest rates as early as July to stimulate economic growth, investors look to them for their offensive rather than defensive characteristics.
“Apple is likely to perform well in both a higher risk and a lower risk environment,” said Sylvia Jablonski, managing director of Defiance ETFs. “You can’t expect 20% to 30% returns from here, but I’d rather put my money here than in a treasury. There’s plenty of growth opportunity even in a tough market, and it pays dividends, buys back a ton of shares, and has a budget.” incredibly strong, which is attractive to investors.”
Indeed, Apple’s growing influence over major stock indexes means that any reversal of the rally would pose a broader risk to markets. Stocks make up about 7.5% of the S&P 500 index, a level that has peaked in recent years.
“When a company does as well as Apple, people can feel that it is immune to risk,” said Sal Bruno, chief investment officer at IndexIQ. “Right now we are looking at the bright side of being the heavyweight as he has produced fantastic results and shown incredible strength, but whenever we have seen a spike in market concentration in the past, it hasn’t ended well. If there is it’s a feeling that it’s been overvalued, there’s more risk to the market in general.”
Source: Terra
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