With shares of Apple (AAPL) up sharply yesterday, the company’s market cap crossed the $800 billion mark for the first time ever. The company is now just 25% away (barring any shrinkage from buybacks) from crossing the trillion dollar level. We say “just 25%” because from when it was trading in the low $90 range a year ago, shares of AAPL are up 65%. Looking at the chart from the last two years, it sure does look like the chart is starting to go parabolic. Back in late January when AAPL reported Q4 earnings, it already looked extended. Then in late February, it rose even more after Warren Buffett gave it his seal of approval. Now it just keeps rallying!
After a rally of over 65% in a year, it sure is easy to say that AAPL is more than overdue to pullback. When you look back at the stock on a historical basis, 65% y/y rallies are hardly out of the norm. The most recent such run ended two years ago in the spring of 2015. What’s even more incredible is that throughout its life as a public company, AAPL’a average y/y gain has been 31%. Over that same time, that’s 40% better than the 22% average y/y change that Berkshire Hathaway has experienced. While it is true that AAPL now is a larger company than it has ever been, it is not as though the company wasn’t one of, if not, the largest companies in the US when it had many of its most recent 65% y/y gains as well.