The First $1 Trillion Company

Money out of Air
Published in
4 min readAug 8, 2018


Apple was the first publicly traded US company to have a market cap of $1 trillion.

As technology, markets, and economies progress, the valuations of companies sometimes do the unthinkable. Warren Buffett maybe said it best:

“Today’s babies are the luckiest crop in history.”

A lot of people talk about market caps and only a few really understand it. How is it calculated? There are 4,829,926,000 shares of Apple outstanding. These shares are traded, held, bought or sold each day. A share of Apple is traded at any moment and the price is quoted in real-time from 9:30 AM ET to 4:00 PM ET on the stock exchange. Take the price of a single Apple share and multiple it by the number of shares outstanding.

When Apple first hit $1 trillion, each share traded for $207.05. So $207.05 x 4,829,926,000 shares is equal to about $1,000,036,178,300.00. That’s the whole pie. If one share is going for $207.05, theoretically they all should go for $207.05. That makes the entire pie in the sky called Apple worth $1 trillion. That’s your market cap.

It’s how Apple got to $1 trillion.

Ultimately, what it comes down to, is how much is one person willing to pay for a single share at a given point in time. Then plug in the market cap equation (shares outstanding x price) and there you have it. Let’s go even deeper, though. Because the sheer value of one trillion dollars has changed drastically over the years. Or generations.

One trillion dollars today is not what it was five years, 10 years, or even twenty years ago. The value changes over time and that’s because of forces like inflation.

“I sometimes ask myself how it came about that I was the one to develop the theory of relativity. The reason, I think, is that a normal adult never stops to think about the problem of space and time.” — Albert Einstein

Space and time.

There are some similarities in the hard sciences and financial markets. Maybe that’s why quant funds are having so much success on Wall Street today. They are bringing the laws of nature to the mania of markets.

A stock, or any asset for that matter, moves through time. Its shares are traded and the price they maintain at any moment exist within the context of society at a specific moment. One way to think of this is to imagine what $1 trillion means today relative to $1 trillion 100 years ago. Yeah a huge difference — 100 years ago that kind of money could have bought entire countries. Without context, the idea of $1 trillion means nothing. It is an abstraction.

Albert Einstein saying, “don’t forget relativity b.”

Thinking about markets like this change can change the way you look at valuations. More importantly, how you view money in general.

Let’s adjust Apple’s market cap to reflect what was happening during the infamous DotCom Bubble of 1999, the absolute peak of tech euphoria, a moment that will live in all history books forever. When adjusted, $1 trillion today would translate to just $661 billion. I say “just” because whoa, that’s a 33% difference. At the peak of the DotCom Bubble, Microsoft crossed the $600 billion threshold.

So in 1999, when there was less connectivity, less prosperity, less total money in circulation, less credit, and basically less everything else, a company managed to hit $600 billion and if you adjust that number for inflation to reflect it in today’s dollars, its market cap would be $910 BILLION.

$910 billion market cap in 2000. $1 trillion market cap in now. We haven’t gone very far in twenty years.

We can really have fun with these numbers when we look at sales figures and ratios for Apple and a Microsoft. When Microsoft hit its peak in 2000, it was doing about $19 billion in annual revenue. When Apple hit that level, it was doing more than $200 billion annual revenue. That means if we valued Apple at the same price-to-sales ratio as Microsoft back then, Apple would be worth about $8 TRILLION.

Relativity, man.

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Money out of Air

I write about investing and manage my own account. I look for misunderstood companies that can be big long-term winners.