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Considering an Investment in Shares of the Largest Global Corporation?

A financial backer examines information on a computer in a professional setting.
A financial backer examines information on a computer in a professional setting.

Considering an Investment in Shares of the Largest Global Corporation?

In the realm of colossal corporations, these giants have consistently shown their mettle, delivering impressive earnings growth and stock performance. They've constructed robust businesses, proving their resilience even in cutthroat industries, and this sturdiness often bodes well for future victories. A study conducted by our website indicates that all but one of these industry titans have managed to achieve five-year annualized returns in double digits. Consequently, investors who have invested in these companies and have kept their patience have often reaped the rewards.

Currently, roughly half of the top 20 companies are affiliated with the technological sector, specializing in a wide array of innovations such as artificial intelligence (AI) chips, social media, and smartphones. The frontrunner in this esteemed company, holding the title of the world's largest enterprise by market value, is none other than Apple, the manufacturer of the iconic iPhone. With a market value of $3.68 trillion as of January 6th, Apple edged past second-place contender Nvidia, which commanded a market value of $3.54 trillion. This tech titan was also the first ever corporation to reach market value milestones of $1 trillion, $2 trillion, and $3 trillion.

Since Apple's inception in 1976, the company has traversed an extraordinary journey, transforming itself into a consumer electronics and services behemoth that generates billions of dollars annually and observes its stock soar an astonishing 184,000% since its initial public offering in 1980. The question now, however, is: should you invest in Apple's stock, or is it part of a bygone era of opportunity?

Acovared Advantage

Allow us to delve further into the fascinating story of Apple. It's no secret that the company produces some of modern civilization's most renowned consumer products, such as the iPhone, Mac, and iPad. Yet it's more than just the popularity of these items that has kept Apple ahead of the pack. Its unwavering commitment to innovation and ability to forge lasting bonds with its customers, ensuring their unwavering loyalty to its products, has been instrumental in Apple's earnings growth over time. This fervent loyalty, dubbed a "moat" or competitive advantage, has played a pivotal role in Apple's financial success.

As of the trailing 12 months, Apple's gross profit surpassed the $180 billion mark, while revenue topped $390 billion. The company's financial might, as evidenced by its revenue and earnings, has contributed to an annualized return of more than 27% over the past five years. In 2021, Apple rose an impressive 30% as technology companies fueled gains for all three major benchmarks: the Nasdaq, the S&P 500, and the Dow Jones Industrial Average.

One may wonder, given Apple's extensive existence, whether its most spectacular phases of growth are now in the rearview mirror. It's true that this company is unlikely to deliver the same breakneck growth you'd find in a young company just beginning its business or a rapidly growing company like Nvidia that is at the forefront of the AI revolution. However, the dominance Apple has achieved in its market, combined with its own evolution into AI, could herald the dawn of a new era of growth.

An Unexplored Frontier

Apple has now amassed an installed base of more than 2.2 billion products worldwide, and this has paved the way for an exciting, monumental opportunity: revenue from services. The company offers its clientele a smorgasbord of such offerings, from digital content to cloud storage. The result? Record services revenue, quarter after quarter, in recent times.

Additionally, Apple has introduced its AI offering, Apple Intelligence, which is already integrating into the company's products and strengthening loyalty among its followers. This integration should result in an even more powerful experience for users across multiple devices.

So, let us address our original query: should you invest in the world's largest company? This answer varies based on your investment strategy. If you're a risk-taker seeking exponential growth, other opportunities may be more appealing to you. However, for most other investors, Apple, still a compelling buy, boasts a strong moat that ensures its market dominance, and its services and AI expansion may drive future growth. This synergy suggests that the stock has meaningful room to grow and could set the stage for incredible long-term returns.

Investors looking at the tech sector might consider investing in companies with robust financial performance, such as Apple. As proven by its annualized return of over 27% in the past five years, Apple's financial might has consistently yielded significant returns for its investors.

Furthermore, the company's expansion into services and AI presents a promising future for its growth, providing an opportunity for long-term investors to potentially reap substantial returns.

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