A falling apple proves the law of gravity. The price of Apple stock is proving otherwise — soaring past $ 500 a share for the first time on Monday.
Powered by the popularity of mobile devices like the iPhone, Apple’s stock continues its breathtaking rise that knocks down any thresholds that stand in its way. The latest was the $ 500-a-share barrier, a new record, as the stock stormed $ 9.18 higher to $ 502.60.
Last month, Apple trounced ExxonMobil as the most valuable company in the world. Now, Apple’s market value is worth 16% more than Exxon’s. Shares of Apple have enjoyed a 40% rise since last February and a nearly 500% gain from five years ago.
“It’s a once-in-a-generation company that reinvents markets and does no wrong,” says Michael Walkley, analyst at Canaccord Genuity.
Apple’s astounding rise and dominance of almost any market it taps is allowing investors to thumb their noses at all the conventional wisdom about stocks, including:
The crowd is always wrong. The masses, which are bullish on Apple stock, have been dead right. The crowd of money managers, investors and analysts piling into the stock have enjoyed one of the greatest rides by a big stock in recent memory. Of the 40 Wall Street analysts who follow the stock, 38 rate it a “buy” or “strong buy.”
Big companies, eventually, have difficulty maintaining their growth rates. As companies go from tiny upstarts to big-cap publicly traded companies, eventually their growth rates moderate. That’s been the case at Microsoft, Intel and even Google. But Apple continues to post growth like a corporate whippersnapper. Apple’s revenue grew 68% last year, its fastest rate of growth in the past five years, S&P Capital IQ says. Profit, too, jumped 98%, also the fastest clip of growth in the past five years.
Investors need to diversify. With Apple’s stock rising…
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