Apple: Which Groups Are Part of the $1000 Billion Club?

(BFM Bourse) – Graphics processor maker Nvidia briefly crossed the symbolic $1,000 billion market value bar this week, joining a very select club, some of which have failed to stay at this level.

Nvidia in the big leagues. The manufacturer of graphics processors passed last Tuesday 1 trillion dollars in market capitalization, the value of all the company’s shares.

A growth justified by the group’s booming prospects in generative artificial intelligence, ChatGPT, because Nvidia’s products are essential to create the computing power necessary for the training and development of large conversational robots, such as ChatGPT therefore, but also Bard from Google .

Nvidia’s takeover may only be in its infancy. Cited by CercleFinance, Bank of America on Wednesday raised its target price to 500 euros, a potential of more than 25% compared to the current price. This although the capitalization of the American group has fallen slightly ($982 billion *) since Tuesday.

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Nvidia has thus joined a very select club, that of companies that one day broke the ceiling of $1,000 billion in market valuation.

Nine companies have already crossed the bar

According to an infographic from Visual Capitalist cited by John Plassard, investment advisor at Mirabaud, this club includes Apple, Microsoft, Alphabet, Amazon, Meta – Gafam therefore – but also Aramco and Tesla. It is worth adding the Chinese PetroChina to this list. This oil giant had actually been the very first to cross the $1000 billion crossbar when it was listed in 2007 on the Shanghai Stock Exchange (it was already listed in Hong Kong).

But since then, PetroChina has plunged into the stock market. In Shanghai, its price has divided by approximately 4.5 since late 2007 to fall to a dollar capitalization of just over 180 billion. “The stock has been hit by some of China’s biggest economic policy shifts in the past decade, including the government’s abandonment of a commodity-driven development model and its attempts to crack down on speculative ‘fads’ of the kind that made PetroChina the first company. i world to generate $1 trillion [de capitalisation boursière, NDLR] in 2007”, emphasized in 2017 Bloomberg. The press agency then spoke of “the biggest stock market collapse in history”.

Not all members of the trillion dollar “club” have (thankfully) met a fate in PetroChina. But Meta and Tesla are now quite far from this mark, which they crossed in June and October 2021, respectively. interests, rolled their valuations, which are currently around $660 billion for Tesla and $700 billion for parent company Facebook.

Tesla was particularly punished by the Twitter file, as Elon Musk had sold Tesla shares to partially finance the purchase of the social network. This soap opera had also exposed very harsh management practices on the part of the businessman, which in turn damaged the car manufacturer’s reputation. Tesla deliveries were also somewhat disappointing last year. For Meta, the decline in the title could be explained by fears in the ad market – particularly changes to the iOS privacy policy that affect user tracking and targeted advertising – as well as market skepticism about it becoming the metaverse.

Five groups still in the club

There is still the current “1000 billion” club, which only US tech groups belong to, with the exception of Saudi Aramco. The Saudi giant with staggering profits ($161 billion in 2022) surpassed this bar as soon as it went public in December 2019, and also broke the $2 trillion mark the day after the IPO. Since then, the title has not experienced dizzying movements on the stock market, which fluctuated between $25 during the outbreak of the pandemic and $37 during the peak of the barrel of oil in the spring of 2022.

For the other four members, Apple was the very first American company to break the 1000 billion dollar market cap in August 2018. If Saudi Aramco beat it for the 2000 billion (which the creator of the iPhone crossed in 2020), Apple is currently the only company that has exceeded 3 trillion dollars, in January 2022. The Apple group, which has resisted fears about the economy well in recent quarters with convincing financial results, It is not far from there, its capitalization is currently 2830 billion dollars.

But perhaps Apple will be joined by Microsoft ($2.47 trillion), which surpassed $1 trillion in April 2019 and $2 trillion in June 2021. The company founded by Bill Gates has recently benefited from the artificial intelligence craze after investing billions of dollars in OpenAI , parent company of ChatGPT, whose technologies it integrates into its services, such as the Bing search engine.

The current “club” is completed by Alphabet, the parent company of Google, and Amazon. Alphabet had also broken the ceiling of 2000 billion dollars by the end of 2021 (the 1000 billion had been reached in January 2020). Like other tech groups, Alphabet suffered in 2022 before recovering since the start of the year. Its capital value currently stands at $1570 billion in market capitalization.

Amazon, for its part, had crossed 1000 billion in April 2020 and approached 2000 billion without reaching it in the summer of 2021. But the e-commerce group also managed to lose the “business” more than Petrochina. As Bloomberg then noted, the group swallowed $1 trillion in capitalization between its high in July 2021 and early November 2022, punished by disappointing results and fears about the economy. The company, like Alphabet, has recovered from the hair of the beast since the beginning of the year with a capitalization of 1.2 trillion dollars.

The figures stopped on Friday afternoon.

Julien Marion – ©2023 BFM Bourse

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