Apple is one of the big tech engines pulling the market higher, but it is unique in that investors view it as an asset class unto itself.
Apple is one of the big tech engines pulling the market higher, but it is unique in that investors view it as an asset class unto itself. That is one reason the big tech bellwether Wednesday became the first U. S. company to have a market cap of $2 trillion, just two years after first crossing the $1 trillion mark on Aug.2,2018. Microsoft, Amazon and Alphabet also have market caps above $1 trillion. Apple has been on a tear since it reported stronger than expected earnings July 30 and a 4-1 stock split, gaining about 21% since then. As it often does, the stock has outrun skeptics, who said the stock split should not drive it higher since investors have access to cheaper fractional shares. “People see safety in that name, as crazy as it sounds,” said Matt Maley, equity strategist with Miller Tabak. “With the market hitting new highs, you’d think people would be looking at what is the next big winner. [The market’s] gone so far, where do people have to be? They have to be in this name. It has a lot of cash. You can say that gives you a certain amount of safety and income when the market is making new all time highs and is overvalued.” Apple had $193.8 billion in cash at the end of its fiscal third quarter on June 30. At a time of ultra low interest rates and no yield in Treasurys, investors are also drawn to companies that pay dividends. Apple paid out its quarterly dividend of $0.82 a share last week and will split its stock on Aug 31.
