Apple just overtook one of the world’s largest oil and gas companies in Saudi Aramco to become the most valuable company in the world. This past Friday, investors on the stock market were stunned when Apple’s share price jumped by an astonishing 10%. This came on the heels of Apple releasing it’s quarterly earnings reports which showed the company made revenue of $59.7 billion for the April-June 2020 period.
Judging by these numbers, the COVID-19 pandemic has had a major impact on a lot of industries, but apparently not Apple’s. These revenue numbers show an 11% increased in profits for the company when compared to the same period last year.
In addition to the great news about the company’s earnings, Apple also announced a four-for-one stock split which will help aspiring investors acquire shares in the company at a much more affordable price than before. These shocking revelations have thrown Wall Street into a tailspin as many investors are trying to play catch up to ensure they don’t miss the next big bump.
What it all means
In an article published by Refinitv, 29 professional stock analysts believe that Apple stock is well worth buying right now. One of the major things that caught Wall Street analysts and investors alike off guard was that the surge in Apple’s stock price outpaced all of the price target predictions that some analysts gave.
While some may seem huge spikes in technology stocks as “too risky” Apple has proven time and time again that their business model works for the long-term investor. Ryan Derrick who is the chief marketing strategist for LPL financial said the following in a recent note to his clients “Looking out over the next [six] to 12 months, we believe that investors will continue to place a premium on companies that are able to organically grow sales, especially in a low-growth environment”
This statement couldn’t be more true as the COVID-19 pandemic has sent virtually every industry into “testing mode” to determine how “recession proof” their business model really is. One company that had proven it’s necessity to consumers is Amazon as even despite the pandemic, the company continues to rake in mind-blowing profits.
Apple’s stock price and overall valuation beating out one of the largest oil and gas companies in the world is no coincidence. Companies like Saudi Aramco, who apple beat out in terms of stock price, are experiencing devastating side effects of the COVID-19 pandemic as crude oil prices are on average 34% lower than what they were at the beginning of the year.
As the coronavirus pandemic continues to sweep the world, it’s undoubtedly re-shaping the way that investors look at company valuations in the long-term. Any business that is able to thrive in such a climate is surely on you will want to have in your portfolio for those rainy days.
With Apple showing no signs of slowing down, we can only sit back and wait to see what the future holds.