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Apple Beats Microsoft as the Most Valuable Company

Apple Headquarters

Source: Apple Headquarters, Infinite Loop in Cupertino, California | Wikipedia

Apple’s continuous strong market performance has made it the most valuable company by market capitalization. In fact, it was able to beat Microsoft’s record in 1999.

Apple’s Market Capitalization

The Cupertino-based company’s market capitalization reached $621 billion on trading last Monday, outranking the previous record made by Microsoft. However, Apple’s new achievement does not account for inflation. If it will be based on today’s dollars, the PC maker’s 1999 record would have given it a market capitalization of $850 billion. Now, it is worth $257 billion.

Although Apple’s success doesn’t account for inflation, it has put the company in a strong cash position. This led the iPhone maker to distribute $2.5 billion in cash to its shareholders last week as a dividend payment. However, instead of seeing its market capitalization drop by the same amount, it actually gained more than $11 billion last Friday. As a result, Apple’s stock valuation  reached $607.54 billion.

Its increasing market cap has made the company worth more than 50 percent compared to Exxon Mobil Corp, the second most valuable company by market capitalization. Prior to this, Apple was able to beat Exxon last August 2011 with a previous value of $347 billion. Furthermore, this makes Apple the world’s most valuable company since the end of last year.

Earlier this year, the company became worth more than Microsoft and Google combined after its market cap reached $456 billion. In May 2010, the iPhone maker saw its market capitalization increased to $222 billion, getting past Microsoft.

Apple Stock Results

Last Friday, Apple’s stock (AAPL) closed at a record price of $648. The company’s stock gained traction due to rumors with regard to the next-generation iPhone, iPad Mini, and Apple television set.

Prior to this, the company’s stock quickly escalated earlier this year after it announced the blowout winter quarter results of its iPhone 4S launch. However, its stock headed downward in April, reaching a trough of $530.

It made a slight increase since then, gaining ground following Apple’s announcement of its most recent quarterly earnings. However, the company never regained the momentum that it had earlier this year.

Although it looks impossible to explain accurately the irrational movements in stock prices, Apple seemed to benefit from rumors that surround its upcoming devices. Its so-called iPad Mini and enhanced Apple TV could extend the company’s lead in the tablet and Internet set-top box markets.

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