Apple’s share price has hit another record high, and its market value has risen more than one jpy year so far this year.

Apple’s market capitalisation has risen by more than $400bn so far this year, despite a drop in profit margins this year and the failure to surprise analysts with the new iPhone. Shares in the tech giant closed at record highs on Friday, rising 65 per cent so far this year, their highest gain in a decade and almost three times the gains in the Standard and Poor’s 500-stock index.

Apple’s market capitalisation has risen by more than $400bn so far this year, despite a drop in profit margins this year and the failure to surprise analysts with the new iPhone. Shares in the tech giant closed at record highs on Friday, rising 65 per cent so far this year, their highest gain in a decade and almost three times the gains in the Standard and Poor’s 500-stock index.

Apple's share price has hit another record high, and its market value has risen more than one jpy year so far this year.

Since January, it has gained $407bn in market capitalisation, almost as much as JPMorgan Chase, the largest US bank with assets. It also puts Apple ahead of Microsoft and regaining the title of the world’s most valuable publiccompany.

“People are looking for certainty in an uncertain market,” says Michael Kagan, portfolio manager at ClearBridge Investments. ”

2019 could be a year of blandness in Apple’s product launch and financial performance. While the iPhone 11 has been well received, it is widely believed to be a test product relative to its competitors, rather than an industry leader.

Apple’s share price fell at the end of last year to make this year’s rally a little exaggerated. Apple’s shares plunged 31 per cent between October last year and the end of 2018 after the company warned that its sales in China would be lower than expected.

Earnings and revenue have fallen this year. Apple’s operating profit fell 10 per cent to $63.9bn in the 12 months to September, well below the company’s record $71.2bn in 2015. Apple’s revenue has grown 15 percent since 2015, but has fallen 2 percent to $260 billion this year as iPhone sales fell.

But investors cited the company’s stock buybacks, service revenues and 5G’s expected success as reasons for optimism.

Apple has spent $320billion buying back shares over the past decade, the largest of any company in the Standard and Poor’s 500-stock index, while Microsoft, in second place, has spent just $116 billion on it.

At the end of September, Apple had more than $100 billion in cash and short-term securities on its balance sheet.

As Apple’s reliance on hardware sales declines, the company is now also achieving the kind of fixed, recurring revenue that investors often prefer. Its services sector reported revenue of $46 billion in the fiscal year ended Sept. The company also launched a subscription streaming TV service this month, competing with Netflix and HBO.

“The market thinks software is more important than hardware,” said Pelham Smithers, an independent analyst. Software has shorter cycles and higher profit margins. ”

Despite Apple’s outstanding performance, Luca Maestri, its chief financial officer, said the company’s valuation was still low compared to its peers and he was “very pleased” with overall profitability and the momentum in the services business and wearables. Apple’s current price-to-earnings ratio is about 21, down from 24 times that of the technology sector.

Wall Street analysts are generally upbeat. Of the 41 analysts surveyed, 19 rated the stock as “buy” and only five rated it “sell”.

Analysts at BofA said the stock’s potential was “huge”. They expect Apple to “perform relatively well” in the next iPhone cycle. Apple is widely expected to launch the company’s first 5G smartphone in the next iPhone cycle.

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