To parents and kids, August is all about summertime fun and no school. But for Apple Inc. (AAPL), it's the month of massive valuation milestones. Today, I'll take you down memory lane of the tech giant's multiple trillion-dollar achievements ... then we'll study how it relates to the stock.
- Apple became a trillion-dollar company in August 2018.
- Two short years later, in August 2020, the stock reached $2 trillion.
- Now in August 2021, the tech giant is valued at $2.5 trillion. Growth like that attracts a lot of Big Money investors.
Alright, let's get to it. Just three short years ago—on Aug. 2, 2018—Apple made history, becoming the first U.S. company to reach a trillion-dollar valuation. Talk about a headline, I'm sure it likely surprised many investors.
Let's be honest: it's rare to be that big. But in Apple's case, it's not unreasonable. That's because the company makes lots of money, selling iPhones, iPads, iPods, music ... you name it. Rewinding a bit, in Apple's fiscal 2018, the company generated an eye-popping $265 billion in sales and had net income of $59.5 billion. With numbers like that, to me it warranted the trillion.
But had investors decided to sell the stock back then because of the lofty market cap, they'd be sad. That's because they would have left a lot of money on the table. Why? Because just two years after reaching the insane $1 trillion milestone, Apple made history again, crossing the $2 trillion valuation. That happened on Aug. 19, 2020.
Great companies tend to be great—what can I say? But there's clearly something about these milestones and August. I say that because here we are in August 2021, and Apple is roughly a $2.5 trillion sized company. Needless to say, betting against the stock hasn't been a good idea over the long term.
So, that begs the question: what's next for the stock? Well, when you have a company that continues to dominate like Apple does, it attracts Big Money investors. Basically, institutions like betting on winners. That's where I focus a lot of my proprietary research. And Apple stock has been a magnet for Big Money over the years.
Let me show you what I mean. Below is a three-year chart of Apple. Clearly, it has been a one-way train higher, nearly tripling. I've flagged the trillion-dollar milestones in yellow:
You'll also see signposts in the chart. Those are the times when Apple stock fired Big Money buy signals. Great stocks tend to get a lot of them. I like to say how that's the stairway to heaven. When a stock gets multiple Big Money signals, the shares usually march higher. I've learned to not fight that trend.
Now, are there short-term pullbacks along the way? Sure, but the long-term trend is all that matters at the end of the day.
The Bottom Line
Let's wrap this up. Apple reached the trillion-dollar milestone just three short years ago. Since then, the stock has nearly tripled, rewarding long-term investors. Big Money buying has been consistent along the way. This author believes that the long-term narrative hasn't changed for the stock: UP.
Disclosure: The author holds no position in AAPL at the time of publication.