Apple reaches $5 trillion market cap, 2nd company after NVIDIA
What's the story
Apple has become the second publicly traded company in history to achieve a market capitalization of over $5 trillion, after NVIDIA, which officially became the world's first $5 trillion company in October last year. The milestone was reached on Wednesday when Apple's shares rose by 0.5% to a record closing price of $342.96. This pushed the company's total market value to around $5.005 trillion, surpassing the coveted threshold for the seventh time during regular trading hours.
Market resilience
Apple's milestone amid tech sector struggles
Apple's new milestone comes at a time when the wider technology sector is struggling.
The Nasdaq Composite index dropped nearly 1.9% on Wednesday, amid fears of inflation and the potential for higher interest rates.
Despite these challenges, Apple has managed to maintain its growth trajectory under former CEO Tim Cook's leadership, who stepped down on September 1 and passed the baton to John Ternus.
Legacy impact
Cook's legacy after stepping down as CEO
Under Cook's leadership, Apple's market value grew by nearly 13 times in his 15 years as CEO.
He also oversaw a near quadrupling of annual iPhone sales and a massive expansion of Apple's services business from about $10 billion to over $100 billion in annual revenue.
Cook also introduced the Apple Watch and AirPods, which together bring in over $30 billion annually.
Leadership transition
Ternus's challenges as new CEO
Ternus, who has been with Apple for a long time, now faces the task of keeping the company's growth and technological edge intact.
Investors are looking toward Apple's latest products such as the iPhone 18 Pro models and its first foldable smartphone, the iPhone Duo, to keep that momentum going.
However, rising component costs and questions over whether new products can justify its high valuation pose major challenges for Ternus.
AI challenges
AI and competition concerns for Apple
Apple has been slow to develop advanced AI models, which has led the company to seek external partnerships like working with Google on Siri.
The next earnings report on November 2 will give investors a clearer picture of demand for its latest devices and how rising component costs are impacting its business.
This comes as Apple faces growing competition from OpenAI and others in the consumer device space.