This column is authored by Anand Vatsya, Content Manager at Oliveboard
That imaginary 13-figure Mark!!
Few years back it was really hard to tell, if this would ever happen. The dot-com bubble burst took with itself a lot of business giants while asking the newbies even to hypothesize about that figure would have been a crime in itself.
Well to tell you, the figure doesn’t seem to be imaginary anymore. Lately, debates and conclusions have been pretty high regarding the first to be trillion-dollar company and I am talking about the stats and facts here, and not just speculations.
The election of Donald Trump, although blatantly unexpected, has not dampened the spirits of the technological giants, who are presumably, in one of the most important business races of all times.
Let’s first try putting a trillion dollars into perspective.
- A single company with a market cap of a trillion dollars would outdo 180 major and minor economies of the world out of a total of the current number of 195, in terms of GDP.
- Buying a sports team is like a status symbol for the billionaires and since you’re more than that, you can go for a shopping spree for the super-rich sporting franchisees such as the English Premier league, Indian Premier league, the NFL, the NHL, the NBA and would still have a lot to spare.
- Buy Apple or if you’re a good person and want to spare the company, you can buy somewhere in the range of 1.3 billion iPhone 7 plus models.
- Laid end-to-end, a trillion-dollar worth of notes would stretch further than the distance from the Earth to the sun
So now that you have an idea of what exactly we’re talking about, let’s have a look at the contenders,
The Cool Guy, Apple Inc.
All good was certainly not expected post the presidential elections but the way Apple has outperformed the markets, it has got the industry leaders thinking, if it can be the first ever to touch the enticing figure. Well, with the current market cap of $763 billion, just about 24% shy of the eye-popping figure, you could most certainly bet your million dollars on this company.
Since closing on $109 on Nov 7, the share prices of the company surged to the current price of $146, bridging a gap of approximately $170 billion to reach its current market cap, which is equal to the market value of the American pharmaceutical giant Pfizer.
Here’s how Apple is going to fare in the race,
- Just last month the share price of the company reached an all-time high of $153 in turn eclipsing the $800 billion mark, reflecting the fact that the signs are pretty darn good.
- The world’s most iconic investor and his company, Berkshire Hathaway has more than doubled its investment in Apple. And one thing, that we know for sure, is when Warren Buffett is making an investment decision, the chances of it going down are supposedly zero.
- The much-anticipated launch of the iPhone 8, which has been creating a lot of buzz lately.
Assuming that the latest iPhone variant, iPhone 8 lives up to the hype and the company’s recent foray into augmented reality goes as per planned, the Cupertino giant will not have a lot of difficulties to match the target share price of $191.
The Everything Guy, Amazon
A company yet to reach even the halfway mark of the alluring figure is also being touted as the next likely contender, by Barclays analyst, Ross Sandler. With a current market cap of $479 billion, and successive double digits year-on-year growth from the past 20 years, seems Mr. Sandler has some big numbers to support his claim.
Unfazed by its competitors in the race, Amazon posted a 48% high on its stock price compared to last year. Even the company’s profit margins saw a three-fold increase of 27% which translates to a staggering $2.7 billion, over the previous year.
Also, if the proposed acquisition of Whole Foods goes through, which is valued at a figure of $13.7 Billion, it would be a real statement of intent by the company and would further strengthen it’s position to reach the magical figure.
Although the signs are pretty decent for the e-commerce and could computing giant, it still needs to bridge a monumental gap from its current stock pricing, which unlike Apple, might take considerable years to achieve.
The Efficient Guy, Tesla, Inc.
Elon Musk’s electric car company, Tesla has also been called upon in the list as the dark horse. The ironic part is unlike others, Tesla was brought into the race by the CEO himself, when during the acquisition of SolarCity last year, Musk said that the combined entity could one day reach $1 trillion.
The company’s stock price has managed to travel from a lowly $33 in 2012 to an eye-catching $383 as of this writing and even after a loss of $700 million last year, it has now successfully overtaken both Ford and GM, making it America’s most valuable car company. Although seeing it’s till date performance, one can say that the company is hugely overvalued, as agreed upon my Musk himself on Twitter, but the billionaire CEO was quick to add that the stock price of any company depends on its future potential and not its history.
A Trillion-dollar market cap seems bit too far-fetched a dream even for one of the most visionary CEOs of the world, yet given the recent exploits by Tesla, and a time-frame of at least 10 years, who knows.
The Dynamic Guy, Alphabet Inc.
The parent company of Google, and the second best placed company on the S&P 500, virtue of its market cap, Alphabet Inc, is by no means a laggard in the race. With a current cap of $677 billion, at a stock price of $979, Alphabet is not far behind Apple.
The search engine giant and the company behind the most popular OS in this world – android, is foraying into everything possible from VR to robotics to self-driving cars. But in order to breach the mark, the company still has to rise 32% from its current capitalization, which anyways doesn’t seem too big of a task, given the whole host of things it’s going after.
To sum up, it’s not like these companies are in some sort of race against time, but the day when any of these, or a complete bystander for that matter, achieves the 13-figure milestone, it would not only get the whole world talking, for long, but also the giant would be one to fear in the field.