Apple is on the verge of becoming the first US$1 trillion publicly listed U.S. company, but even if it gets there, it could soon be overtaken as Amazon.com surges from behind.
Started in the garage of co-founder Steve Jobs in 1976, the iPhone maker's annual revenue has ballooned to US$229 billion, greater than the gross domestic product of countries including Portugal and New Zealand.
Apple's market capitalisation on Thursday topped a record US$934 billion, following its unveiling last week of a US$100 billion buyback budget and news that Warren Buffett's Berkshire Hathaway dramatically increased its stake in the company.
Thanks to a 12 per cent rally since its quarterly report last Tuesday, the Cupertino, California company is just eight per cent short of hitting the US$1 trillion valuation mark.
Pointing to Apple's recent 31 per cent jump in service revenue, including music streaming and online storage, CFRA analyst Angelo Zino has upped his target price for the stock from US$195 to US$210, which would put Apple's market capitalisation at US$1.03 trillion.
Zino joins at least 12 other analysts with price targets putting Apple's stock market value at 13 digits.
But Apple is in danger of being beaten to the US$1 trillion mark - or passed soon after - by Amazon.com, the second largest listed U.S. company by market value, at US$780 billion.
Saudi Arabian authorities, meanwhile, have said they expect a planned international initial public offering of Saudi Aramco that would value the national oil producer at about US$2 trillion.
While US$148 billion smaller than Apple on Friday, Amazon of late has expanded its stock price, and its sales, much more quickly than Apple. Amazon's stock is red hot, trading recently at over 100 times expected earnings, compared to more-profitable - but slower growing - Apple's valuation of 15 times earnings.
Apple's stock has risen 24 per cent over the past year, fuelled by optimism about the iPhone X, the company's latest smartphone. But demand for the US$1,000 device has underwhelmed investors, and bulls are now focused on Apple's plan to return more cash to shareholders.
By comparison, Amazon's stock has surged 70 per cent over the past 12 months, bolstered by 31 per cent revenue growth as more shopping moves online and businesses shift their IT departments to the cloud, where Amazon Web Services leads the market.
Amazon is also competing more with Apple and Google owner Alphabet as it sells music and video content, its Fire TV device and its Alexa smart home gadget.
At US$765 billion, Alphabet has the third largest market capitalisation on Wall Street, with Microsoft close behind at US$749 billion. Amazon breezed past both them both in February.
Including Facebook, the five largest listed U.S. companies now account for 15 per cent of the S&P 500's US$24 trillion market capitalisation.
To be sure, past stock gains are not a reliable predictor of future performance, and the surge in Apple's and Amazon's shares in recent years has been exceptional by most standards.
But if Apple's stock were to keep growing at the pace seen over the past year, the company's market capitalisation would hit US$1 trillion in September.
Amazon would reach US$1 trillion around October if its stock price continued to rise at the same rate as the past year, and overtake Apple soon after.
Extending forward their own one-year performances, Microsoft would not reach US$1 trillion until early 2019, and Alphabet would take until 2020.
Most Wall Street analysts are less optimistic. The mean analyst price target puts Apple's stock six per cent above current levels at US$200 within the next 12 months, which would elevate its market capitalisation to US$983 billion, according to Thomson Reuters data.
The mean price target of analysts covering Amazon is US$1,850, a 15 per cent premium over its current price, which would give it a market value of US$898 billion.
Analysts target Microsoft to rise 12 per cent to reach US$845 billion, and for Alphabet's market value to increase 16 per cent to US$884 billion.
(Reporting by Noel Randewich, Editing by Rosalba O'Brien)
