On Friday, June 30th 2023, something big happened. Not only did it mark the end of the first half of 2023, but it was also a very good day in the stock market. The S&P 500 climbed 1.2% to close out a great first half of the year. More importantly, Apple gained 2.3% that Friday, and became the first company with a valuation (or market cap) of over $3 trillion.
For reference, Apple was also the first to cross the $1 and $2 trillion mark in 2019 and 2020, respectfully. It is sometimes hard to put into perspective what a $3 trillion market cap means, so why not have a little fun shopping to figure it out? After all, pre-orders for the new iPhone 15 start today.
THE TRILLION DOLLAR MATH
Theoretically an investor, with $3,009,373,000,000 to invest, could not only buy all of the outstanding shares of Apple but would also own the entire company. Every iPhone and iPad, iWatch and MacBook pro sold worldwide would benefit the new owner. Need perspective? Over the past 12 months, Apple has just over $394 billion in sales.
Could there be a different alternative for our rich investor? What other companies could this investor buy in their entirety instead of Apple?
Leaving Apple on the shelf momentarily, we’ll start by adding five of the previous “largest companies” from the S&P 500 to our list:
- Exxon Mobil
- Walmart
- AT&T
- General Electric
- IBM
After buying all of these companies, we have only spent just over $1.2 trillion. Let’s keep shopping…
You can’t have a list with Exxon without having Chevron included. Let’s also include the following:
- Walt Disney
- Pfizer
- Comcast
- Goldman Sachs
- Boeing
- General Dynamics
- Intel
Even after adding all of these names, we still have just over $530 billion burning a hole in our wallet.
All of the stuff from Walmart needs to be delivered, right? So let’s buy:
- United Parcel Service,
- FedEx
- Ford
- General Motors
We could also throw in Marriott, Best Buy, Regions Financial and Molson Coors (that one is for me, I enjoy an occasional Coors Light).
After all of that, we are finally getting close! We only have $93 billion left to spend…
How about we throw in the entire publicly traded U.S. Airline industry? This would include:
- American Airlines
- Delta
- Southwest Airlines
- United Airlines
- JetBlue
- Alaska Air
I may be missing a few of the small airlines, but we are finally about out of cash.
It is a bit overwhelming to think that each time Apple stock is up 3%, it gains the market cap of the entire US airline industry.
THE FINAL SHOPPING CART
For all of my chart and excel nerds out there: here is the choice for our $3 trillion investor:
*numbers in millions
THE FINAL PURCHASE
Apple produced just over $394 billion in revenue last year, while the other companies provided sales of just over $2.8 trillion combined. The stock market was valuing Apple as equivalent to the other 27 companies combined. Actually, you would have about $2 million in change if you decided to sell Apple and buy the other 27 companies.
What is $2 million between friends?
David McGrath
Associate Managing Director and Member of the Investment Committee
Thank you for your continued support. As always, I hope this newsletter finds you and your family well. May your blessings outweigh your sorrows on this any every day. Also, please be sure to tune into our podcast, Trading Perspectives, which is available on every platform.
Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as those of our Investment Committee, is subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.