Apple on Wednesday became the first US company to reach a market cap of $2 trillion. The iPhone maker's share price hit $466.77 around 11 am ET, making it the most valuable publicly traded company in the world, leaving behind the likes of Saudi Aramco, Microsoft Corporation, Alphabet's Google and Amazon.

Although it fell below the $2 trillion mark as the day moved on, and shares closed at $462.83, giving it a market cap of about $1.98 trillion, it is just a matter of time that it bounces back into the coveted territory. In fact, investors over the past few weeks had expected the company to reach the milestone anytime given the dream run it was having at the Wall Street.

Interestingly, it took Apple almost exactly two year's time to double its market value. However, the scene was quite different two years back.

On a New High

Apple to delay iOS features to 2019
Apple reached the $2 trillion mark almost exactly two years after it became the first company to achieve $1 trillion in valuation. The coveted figures were achieved on August 2, 2018 REUTERS

Apple's shares have been rallying since it reported third-quarter fiscal 2020 earnings on July 30, wherein it reported revenues of $59.7 billion despite feeling the heat of the coronavirus pandemic. It reached the $2 trillion mark almost exactly two years after it became the first company to achieve $1 trillion in valuation. The coveted figures were achieved on August 2, 2018.

Shares of Apple have been on a tear for years but they've performed particularly well in 2020, gaining more than 50 percent, despite the impact on its sales and revenues due to the Covid-19 pandemic. The company's stock has gained, on average, 3.5 percent every week since the beginning of June and went on a rally after it reported impressive fiscal third-quarter results. In fact, this has been Apple's best third quarter ever on record.

Apple Leads the Race

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Apple is also a big purchaser of its own stock, authorizing a $50 billion increase to the company’s share repurchase program in 2020, following top-offs of $75 billion in 2019 and $100 billion in 2018 Apple

The scene has changed drastically between Apple's acceleration from the $1 trillion club to the $2 trillion mark. Notably, the race to $1 trillion had primarily been confined to tech giants. At that time, speculation had been rife as to which company would be the first to reach this milestone as Amazon reached the $1 trillion mark in market cap just two weeks after Apple.

This time, however, Apple has taken a massive lead, with both Amazon and Microsoft's market value just above $1.6 trillion, while Alphabet is still hovering around the $1 trillion mark. That said, the scene too has changed in the past couple of years. During that time, Apple's revenues were driven by robust sales of iPhone, although it had already started slowing.

What Lies Ahead?

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iPhone sales are further slowing but Apple CEO Tim Cook has made some intelligent moves by shifting focus to its Services section IANS

Today, iPhone sales are further slowing but Apple CEO Tim Cook has made some intelligent moves by shifting focus to its Services section. Apple first started to refocus investor attention on its services business back in 2015, as iPhone growth first slowed. Services, including Internet Services, App Store, Apple Play, Apple Music and AppleCare, and licensing and other services have been driving the company's revenues of the past couple of years which now become the company's focus area.

In fact, investors have started seeing Apple's business less like other hardware makers and more like a software company. Apple needs to hold on to these in the long term for sustained growth. Moreover, in the past two years Apple has diversified its portfolio. Revenues from Apple Pay has been working miracles for the company, which further got a boost owing to the pandemic as more people shifted to contactless payment during this time.

Also, over the past two years, Apple, in a bid to bolster its business, has launched new subscription services such as Apple News+ and Apple TV+, a competitor to Netflix and Disney+. Last year, Apple also introduced Apple Card, a credit card partnership with Goldman Sachs integrated into the iPhone's software.

Apple declined to provide earnings guidance for this quarter due to continued uncertainty from the Covid-19 pandemic. However, the company is likely to introduce a host of things over the next few months. Apple is expected to announce a new lineup of iPhone 12 devices in early fall, including one with a 5.4-inch display. Other products expected to release this year or early next year include premium Apple-branded headphones, a redesigned iMac, the first Macs running Apple's own silicon, a Tile-like tracking device, and more.

There are other factors behind Apple's rise. Tech stocks are in general doing well and have been largely responsible for the market's bull run. Apple is also a big purchaser of its own stock, authorizing a $50 billion increase to the company's share repurchase program in 2020, following top-offs of $75 billion in 2019 and $100 billion in 2018. That said, Apple's recent achievement wouldn't have been possible had investors not undertaken a major re-appraisal of the company's business model.