Today I joined the FOX Business network Mornings with Maria, hosted by Maria Bartiromo. The show has a daily segment “The word on Wall Street” segments. This is segment where three veteran Wall Street Professional discuss the latest headlines moving the market. The topic I discussed with Maria was Apple Stock. Yesterday Apple’ stock was valued at slight over two trillion Dollars, making it the most valuable company in the world, and the most valuable company in history.

Apple briefly hit this valuation on August 19, 2020 creating a flurry of headlines across the news. What is Ironic about Apple becoming a two trillion dollar company is that only two years ago Apple was the first company to hit a $1 trillion valuation. The size of Apple as a company has created a lot discussion and concern for a variety of reasons. From an investor standpoint the concern is that a small number of companies are taking over large portions of major market indices. There is also concern that so few companies control such large parts of the economy. Personally, I think this concerns have merit but less so with Apple. Apple has a legitimate competitor and has almost become a utility in the way smart phones are used today.

Apple famous for their iPhones, iPads, and MAC computer have some very interesting catalyst coming up for them in the very near future.  There Nine hundred and fifty million iPhones outstanding and close to three hundred and fifty million of them will be upgrade eligible in the next year or so. Why is this so significant? This is so significant because 5G is about to come online for wireless services. 5G wireless services is supposed to be the fastest Internet ever that is delivered wirelessly, the same way data streams to us now.

Apple stock was not a great performer for many of the years in the mid-2010s, and struggled to find an identity after the passing of Steve Jobs. In my opinion the main reasons for the lack of performance for the stock was iPhone upgrades. As new iPhones would come out these newer models would not be substantially different or better from the previous models, while simultaneously older models were lasting longer having the devastating effect for Apple prolonging the upgrade cycle. This prolonged upgrade cycle hurt earnings, and hurt the companies earnings multiple making the stock relatively cheap versus the overall market.

These drags or anchors on Apples stock price have now all disappeared, and with 350 million out of 950 million becoming upgrade eligible into what is the biggest game changer and catalyst’s for cell phones upgrades in a generation. This has pushed the stock to massive valuations.

The less discussed portion of Apple’s business is their services business. This business is going to do between $50 and $60 billion of revenue in 2020 which is growing at 20% a year and the margins in the service business or are north of 60%. Some analysts think this business could profit $50 Billion by 2025.

These catalyst have propelled Apple stock a much higher valuation, and then when you take an overall look at the market, Apple is one of the biggest and safest companies in the world and it's a company that's thriving in a Covid environment. The stock is also headed for a four for one stock split at the end of August. When you add up all of these factors simultaneously the market gives us the worlds first two trillion dollar company. This is what I tried to get across today on Fox Business Mornings with Maria segment “Word on Wall Street.”