Apple’s Colossal Market Cap as it Hits $3 Trillion
Apple’s Colossal Market Cap in Context
In January of 2019, Apple’s market capitalization stood at $700 billion.
While this was perceived as a colossal figure at the time, when we fast forward to today, that valuation seems a lot more modest. Since then, Apple has surged to touch a $3 trillion valuation on January 3rd, 2022.
To gauge just how monstrous of a figure this is, consider that Apple is no longer comparable to just companies, but to countries and even entire stock indexes. This animation from James Eagle ranks the growth in Apple’s market cap alongside top indexes from the UK, France, and Germany.
Let’s take a closer look.
Apple Takes On Europe
The three indexes Apple is compared to are heavyweights in their own right.
The FTSE 100 consists of giants like HSBC and vaccine producer AstraZeneca, while the CAC 40 Index is home to LVMH, which made Bernard Arnault the richest man in the world for a period of time last year.
Nonetheless, Apple’s market cap exceeds that of the 100 companies in the FTSE, as well as the 40 in each of the CAC and DAX indexes.
|Stock/Index||Market Cap ($T)||Country of Origin|
|CAC 40 Index||$2.76T||🇫🇷|
|DAX 40 (Dax 30) Index*||$2.50T||🇩🇪|
*Germany’s flagship DAX Index expanded from 30 to 40 constituents in September 2021.
It’s important to note, that while Apple’s growth is stellar, European companies have simultaneously seen a decline in their share of the overall global stock market, which helps make these comparisons even more eye-catching.
For example, before 2005, publicly-traded European companies represented almost 30% of global stock market capitalization, but those figures have been cut in half to just 15% today.
Here are some other approaches to measure Apple’s dominance.
Apple’s Revenue Per Minute vs Other Tech Giants
Stepping away from market capitalization, another unique way to measure Apple’s success is in how much sales they generate on a per minute basis. In doing so, we see that they generate a massive $848,090 per minute.
Here’s how Apple revenue per minute compares to other Big Tech giants:
|Company||Revenue Per Minute|
Furthermore, Apple’s profits aren’t too shabby either: their $20.5 billion in net income last quarter equates to $156,000 in profits per minute.
How Apple Compares To Countries
Lastly, we can compare Apple’s market cap to the GDP of countries.
|Country (excluding Apple)||Total Value ($T)|
What might be most impressive here is that Apple’s market cap eclipses the GDP of major developed economies, such as Canada and Australia. That means the company is more valuable than the entire economic production of these countries in a calendar year.
That’s some serious scale.
This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.
Timeline: The Shocking Collapse of Silicon Valley Bank
Silicon Valley Bank was shuttered by regulators becoming the largest bank to fail since the height of the Financial Crisis. What happened?
Timeline: The Shocking Collapse of Silicon Valley Bank
Just days ago, Silicon Valley Bank (SVB) was still viewed as a highly-respected player in the tech space, counting thousands of U.S. venture capital-backed startups as its customers.
But fast forward to the end of last week, and SVB was shuttered by regulators after a panic-induced bank run.
So, how exactly did this happen? We dig in below.
Road to a Bank Run
SVB and its customers generally thrived during the low interest rate era, but as rates rose, SVB found itself more exposed to risk than a typical bank. Even so, at the end of 2022, the bank’s balance sheet showed no cause for alarm.
As well, the bank was viewed positively in a number of places. Most Wall Street analyst ratings were overwhelmingly positive on the bank’s stock, and Forbes had just added the bank to its Financial All-Stars list.
Outward signs of trouble emerged on Wednesday, March 8th, when SVB surprised investors with news that the bank needed to raise more than $2 billion to shore up its balance sheet.
The reaction from prominent venture capitalists was not positive, with Coatue Management, Union Square Ventures, and Peter Thiel’s Founders Fund moving to limit exposure to the 40-year-old bank. The influence of these firms is believed to have added fuel to the fire, and a bank run ensued.
Also influencing decision making was the fact that SVB had the highest percentage of uninsured domestic deposits of all big banks. These totaled nearly $152 billion, or about 97% of all deposits.
By the end of the day, customers had tried to withdraw $42 billion in deposits.
What Triggered the SVB Collapse?
While the collapse of SVB took place over the course of 44 hours, its roots trace back to the early pandemic years.
In 2021, U.S. venture capital-backed companies raised a record $330 billion—double the amount seen in 2020. At the time, interest rates were at rock-bottom levels to help buoy the economy.
Matt Levine sums up the situation well: “When interest rates are low everywhere, a dollar in 20 years is about as good as a dollar today, so a startup whose business model is “we will lose money for a decade building artificial intelligence, and then rake in lots of money in the far future” sounds pretty good. When interest rates are higher, a dollar today is better than a dollar tomorrow, so investors want cash flows. When interest rates were low for a long time, and suddenly become high, all the money that was rushing to your customers is suddenly cut off.”
|Year||U.S. Venture Capital Activity||Annual % Change|
Why is this important? During this time, SVB received billions of dollars from these venture-backed clients. In one year alone, their deposits increased 100%. They took these funds and invested them in longer-term bonds. As a result, this created a dangerous trap as the company expected rates would remain low.
During this time, SVB invested in bonds at the top of the market. As interest rates rose higher and bond prices declined, SVB started taking major losses on their long-term bond holdings.
Losses Fueling a Liquidity Crunch
When SVB reported its fourth quarter results in early 2023, Moody’s Investor Service, a credit rating agency took notice. In early March, it said that SVB was at high risk for a downgrade due to its significant unrealized losses.
In response, SVB looked to sell $2 billion of its investments at a loss to help boost liquidity for its struggling balance sheet. Soon, more hedge funds and venture investors realized SVB could be on thin ice. Depositors withdrew funds in droves, spurring a liquidity squeeze and prompting California regulators and the FDIC to step in and shut down the bank.
What Happens Now?
While much of SVB’s activity was focused on the tech sector, the bank’s shocking collapse has rattled a financial sector that is already on edge.
The four biggest U.S. banks lost a combined $52 billion the day before the SVB collapse. On Friday, other banking stocks saw double-digit drops, including Signature Bank (-23%), First Republic (-15%), and Silvergate Capital (-11%).
|Name||Stock Price Change, March 10 2023||Unrealized Losses / Tangible Equity|
|First Republic Bank||-15%||-29%|
|Fifth Third Bancorp||-4%||-38%|
|Bank of America||-1%||-54%|
Source: Morningstar Direct. *Represents March 9 data, trading halted on March 10.
When the dust settles, it’s hard to predict the ripple effects that will emerge from this dramatic event. For investors, the Secretary of the Treasury Janet Yellen announced confidence in the banking system remaining resilient, noting that regulators have the proper tools in response to the issue.
But others have seen trouble brewing as far back as 2020 (or earlier) when commercial banking assets were skyrocketing and banks were buying bonds when rates were low.
The whole sector is in crisis, and the banks and investors that support these assets are going to have to figure out what to do.-Christopher Whalen, The Institutional Risk Analyst
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