Apple passes $2 trillion valuation despite coronavirus pandemic

The midst of a pandemic is a bad time to be doing business, but it hasn’t slowed down one of the world’s most valuable companies.

Apple has fulfilled its prophecised $US2 trillion ($A2.78 trillion) valuation, briefly becoming the first American company to hit the milestone on Wednesday.

The computing giant, founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne (who left the company after less than two weeks and made a total $US2300 from the venture) has had its valuation soar in recent years, doubling since August 2018.

Despite economic upheaval, big tech companies are doing fine amid the coronavirus pandemic. Picture: Glenn Chapman/AFP

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That month it set another record as it reached a $US1 trillion valuation.

The company first publicly listed in 1980, selling stock at $US22 a share.

On Wednesday, its share price climbed 1.4 per cent to $US468.65 ($A652.20), signalling the $US2 trillion valuation, before dipping again to close flat.

These aren’t exactly the same shares as the ones from the IPO.

The company has undertaken a number of stock splits, which increases the number of shares in order to decrease the value of its stock and make it more accessible to a wider base of investors.

Apple will split its stock again this month and those shares will be worth a quarter of what they are now (existing shareholders get an additional three for each one they currently own).

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Apple stock will soon be slightly more accessible. Picture: Josh Edelson/AFP

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While the global economy has been slowing down fast amid the coronavirus pandemic, Apple has been making hay.

The company reported record revenue of $US59.7 billion ($A82.8 billion) for the previous quarter as people picked up new tablets and computers to help them work from home.

Sales were up for all of the company’s products around the world.

Apple and other tech companies have watched their stock prices soar in recent months (which also helped its CEO Tim Cook become a billionaire for the first time).

Amazon, Microsoft, Facebook and Google’s parent company Alphabet have, along with Apple, risen in value by a collective $US3 trillion ($A4.17 trillion) since March.

“It’s become the new flight to safety,” New York University finance professor Aswath Damodaran told the New York Times.

Tech companies are cash rich, flexible and digital, helping them benefit from the uncertainty of the pandemic according to Professor Damodaran.

“This crisis has strengthened what was already a strong hand.”

The makers of Fortnite are suing Apple after the game was removed from the App Store for violating its policies. Picture: Chris Delmas/AFP

Apple’s chief money spinner is the iPhone, which unlike Android phones, are only made by one company.

This also allows Apple to control its App Store, taking a 30 per cent cut of all the money that flows through it – a move key developers have been making noise about and which one recently sued the company over.

Epic Games’ highly popular Fortnite game was removed from the App Store and Google’s Play Store after the company added a direct payment option for customers to purchase in game currency at a cheaper price, violating store policies.

The company is now suing Apple, accusing it of anti-competitive conduct, a topic Tim Cook was recently called on to testify about at a US Congressional hearing.

Apple has also grown its bottom line through the introduction of services like Apple Music, News+ and TV+.

It also has a growing wearables portfolio, with the popular AirPods products dominating the wireless headphone market, and the Apple Watch remaining a popular choice for smart watch buyers, especially those already in the Apple ecosystem.

Apple is the second publicly traded company to hit a valuation of $US2 trillion.

The first was Saudi Aramco, the 98.5 per cent state-owned oil company of Saudi Arabia.

It went public last December, briefly exceeding the valuation on its second day of trading.