Last night, Apple became the first US company to breach the mark of a $3 trillion market cap. The party lasted only a brief while, as the firm’s stock brought the valuation down to $2.99 trillion within a few hours.
Over the years, the iPhone has been the major force behind the Cupertino-based tech giant’s bottom line. More recently, its services business has also become an important contributor. Last quarter, services generated $18.2 billion in revenue for Apple, with 25.6% year-on-year growth.
Last week, Daniel Ives, MD of investment firm Wedbush, said in an investor note that Apple’s services business could be worth $1.5 trillion:
The linchpin to Apple’s valuation re-rating remains its Services business which we believe is worth $1.5 trillion in the eyes of the Street, coupled by its flagship hardware ecosystem which is in the midst of its strongest product cycle in over a decade led by iPhone 13. The Services business is further monetizing the Apple golden installed base and poised to reach $100 billion+ annual revenue by 2024.
The company registered $68.2 billion in revenue in services for the fiscal year 2021. Given its growth record over the years, the $100 billion revenue prediction seems achievable.
The company’s competitors have some way to go before they join the $3 trillion club. Microsoft is the closest with a $2.5 trillion market cap, while Google and Amazon are yet to breach the $2 trillion mark.
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