Apple yesterday overtook Microsoft as the largest US company ever in terms of stock price. The California technology giant hit a closing high of US$623.5bn compared with Microsoft’s closing high of US$616.3bn in December 1999.
Of course if it was all just a matter of comparing apples with well Microsofts it would be so easy. Apple is riding high on a number of key factors: a stellar consistency in terms of financial results (recent Q3 revenues were US$35bn with profits of US$8.8bn; an incredibly desirable technology family from iPads and iPhones to Macs and iPods; and exciting technology pipeline in terms of upcoming products from the iPhone 5, a smaller iPad and even a rumoured TV.
Microsoft is today worth US$257bn; but its importance to the technology world and its technology pipeline is every bit as viable and exciting as Apple’s. Not only is Microsoft’s software vital to the world’s of productivity, CRM, ERP, virtualisation, server management and let’s not forget the Xbox platform, Microsoft is on the verge of bringing out one of the most exciting operating systems ever – Windows 8 – and its also bringing out new hardware in the form of Surface computers to take on the iPad.
If anything this talk of valuations is an entertaining distraction from wider issues in the global economy. Tech is riding high but it’s far from wearing a glittering crown when you realise the dangers posed by the struggling stocks of Facebook (now hovering below US$20 from US$38 on the day of its IPO) and Zynga, who no matter what can’t shake its dependence on the Facebook ecosystem.
Then again perhaps this is the way it’s meant to be. If every stock and share in the tech world was flying high at the same time, you would be thinking it was Spring 2000 all over again. Instead we have a complex array of industries that can only loosely coupled under the term ‘technology’ and whose interests transcend telecoms, social media, enterprise software, education, cloud computing, smartphones and new kinds of hardware.
We have a disparate patchwork of valuations on a variety of companies for a variety or reasons. Could it be called realism?
Apple Store image via Shutterstock