Apple now worth $500b - can it stay this big?

Apple's market capitalisation topped $US500 billion overnight, climbing to a mountain peak where few companies have ventured and none have stayed for long.

Apple was already the world's most useful company. The space between it and No. 2 Exxon Mobil has widened rapidly before month, as investors have digested Apple's report of blow-out holiday-season sales of iPhones and iPads. And, more recently, Apple has raised investors' hopes that it'd pay a dividend.

The company's market capitalisation was near $506 billion in late-morning trading because the shares rose $7, or 1.3 per cent, to $542.41.

On Tuesday, the Cupertino, California, company sent out invites to reporters for an event in San Francisco next Wednesday, apparently to disclose its next iPad model. The launch of the hot model was expected around this time, a year after the launch of the iPad 2.

Apple is in rare company. It's the sixth US corporation to arrive the $500 billion milestone, and the one one to be worth that much at current prices.

Exxon, now worth $411 billion, was worth just over $500 billion for 2 short stretches on the end of 2007.

Apple's arch-nemesis Microsoft was worth just greater than $500 billion briefly on the end of 1999, and again in early 2000. It even shot up above $600 billion for sooner or later. The corporate is now worth $267 billion.

Cisco Systems, Intel and General Electric also peaked just above $500 billion in early 2000. Cisco and Intel are actually worth a section greater than $100 billion each, while GE is worth $200 billion.

Exxon's ascent to the $500 billion level was propelled by record oil prices. Cisco, Intel, Microsoft and GE were boosted by the overall stock mania of 1999 and 2000, and the hunger for technology stocks chiefly.

Apple's rise, in contrast, is powered by its mammoth sales and profits, which might be growing at rates remarkable for a corporation its size. And despite its sky-high market capitalisation, Apple's shares aren't expensive in comparison to its earnings.

It's worth 15 times its earnings for the last year. That compares to 21 times earnings for Google and 14 times for the S&P 500 overall. Yet few companies within the index grow their earnings as fast as Apple does: In its latest quarter, its earnings rose 118 per cent from a year ago, to $13.06 billion.

Analysts expect the Apple rally to have some legs. The 35 analysts who've reported to FactSet since Apple's latest earnings report have set a standard price target of $592 per share, or 8 per cent higher than Wednesday's level. That suggests a market capitalisation of $552 billion.

Apple was helped by a general recovery within the stock market after the doldrums of the financial crisis and the recession. On Tuesday, the Dow Jones industrial average closed above 13,000 for the primary time since May 2008.

Apple's stock accounts for three.8 per cent of the worth of the S&P 500 index, per Standard & Poor's, and it made up 6 per cent of the operating income of the five hundred companies within the fourth quarter.

Analysts say Apple's sheer size works against its stock price. Apple stock already makes up a sizable share of the holdings of technology and growth-focused funds, and so they have little appetite for more. Meanwhile, value-focused funds are frequently prevented from buying the shares since the company doesn't pay a dividend.

However, the corporate have been signaling that a dividend is into account, and a number of other analysts now consider it a in view that one could be announced this year. Last week, CEO Tim Cook told shareholders on the annual meeting that the corporate has more cash than it needs, and the board and management are thinking "very deeply" about methods to use the money.

Former CEO Steve Jobs, apparently haunted by the company's lean years within the 90s, had a policy of accumulating cash. The corporate now sits on $97.6 billion.

China's largest oil company, PetroChina, was briefly worth $1 trillion after it listed at the Shanghai stock exchange in 2007, but only in line with its price on that exchange. Its shares also trade in Hong Kong and at the Ny Stock Exchange. In accordance with trading there, its market capitalisation hasn't ever reached $500 billion.

-AP