Apple (AAPL) - Get Report on Wednesday became the first company to cross a $2 trillion valuation, and other tech giants may soon follow.
Apple shares rose to $467.77 on Wednesday morning, sending its market cap briefly above the $2 trillion mark before dropping to close slightly below that figure. But it's a big symbolic milestone that captures the continued dominance of Big Tech in the market, despite the impact of COVID-19. Apple has doubled its market cap in just two years.
“Apple's crossing the $2 trillion mark says a lot about the resilience of the company despite a recent patent infringement case, antitrust hearings, supply chain threats in China and a global pandemic," said Pierce Crosby of TradingView, a social network for traders. "But despite all this, for many in the U.S. and abroad, Apple is a household utility."
Companies trailing just behind Apple in market cap also share that distinction. Microsoft (MSFT) - Get Report, currently valued at around $1.59 trillion, sells the most ubiquitous work software products in the world and now has a fast-growing cloud computing business, and has seen much of its business grow during the pandemic. Likewise, Amazon's (AMZN) - Get Report e-commerce services are essential for many amid shelter-in-place guidelines and store closures, and it all but invented the cloud computing business. Amazon is now valued at $1.64 trillion.
Of course, Amazon and Microsoft have very different performance catalysts in the near term.
For Amazon, "the outlook for the business has never been better," said Jon Markman, Maven's tech columnist. "AMZN has the potential to expand into health insurance, further vertically integrate the core eCommerce business, and expand its market-leading cloud computing franchise as more enterprises migrate workflows to the
Additionally, Amazon can get away with things that most other companies can't, Markman added. Despite warning investors earlier this year that its profits would drop as a result of coronavirus-related spending, its stock has continued to climb, suggesting a high level of investor confidence in Amazon and its CEO, Jeff Bezos.
Based on that and long-term outlook for the business, Markman suggests that Amazon will be the next to hit $2 trillion -- as well as big milestones beyond that.
"I expect Amazon to beat Apple and Microsoft to $5 trillion, and if current global population trends roughly continue, I would expect a shot at $10 trillion by 2033 (mark your calendar)," Markman said.
As for Microsoft, the outlook appears pretty rosy as well.
Increasing reliance on cloud infrastructure and services, Microsoft's well-diversified technology portfolio, and its established international footprint put the company in a strong position to continue notching valuation gains, even in the face of serious macroeconomic headwinds.
"Reliance on devices, software, and cloud services have gotten an adrenaline shot due to the pandemic and the clear winners have been Big Tech," added Anthony Denier, CEO of the trading platform Webull. "Which company will be the next to join Apple in the $2 trillion club, I’m not totally sure, which is why I own all three.”