Record valuation, but not outsized
Apple is the first S&P 500 company to ever reach a $700 billion market cap. Yet, on an inflation-adjusted basis, it still has way to go to be the most valuable company of all time. Microsoft's market cap peak of $613 billion in 1999 translates to nearly $874 billion in 2014 dollars.
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Apple's market cap size is also relative historically in terms of its valuation within the S&P 500 index. When Microsoft peaked, its market value amounted to nearly 5 percent of the overall value of the S&P 500. In the 1980s, when IBM was the top-valued company in the index, it amounted to more than 6 percent of the blue chips' overall value.
"Currently, Apple wouldn't even be among the top five companies" by that measure, said Howard Silverblatt, senior index analyst for S&P indexes. He noted that Apple's current weighting within the S&P 500 is less than 4 percent, since the overall market has risen to record levels.
Apple's record comes relatively cheap, by historic measures. When Microsoft was at the top, it was trading at 72 times earnings, according to Nasdaq and Factset data. Apple's price-to-earnings ratio is currently 18, in line with the overall S&P, even as the tech giant's sales and profits are growing faster than the overall blue chips—Apple's revenues are growing at 15 percent and its earnings at over 20 percent.
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Munster believes the law of big numbers has kept most investors from giving the iPhone maker a bigger growth premium.
"The apprehension is that it's just such huge company right now. It's hard for investors to imagine what they can do in the future to get things really to grow exponentially," he said.
The iPhone continues to be the company's earnings juggernaut. Next year, the tech giant is expected to launch its first new product category of Cook's tenure, the Apple Watch. Analysts are mixed on the potential popularity of the new wearable device, but they continue to see shares going higher.
Munster and Evercore analyst Rob Cihra have set a price target for Apple shares of $135 over the next year, a level that would give the company a market valuation near $800 billion.
More than one Apple bull has said out loud he sees the company's market valuation reaching $1 trillion. Apple investor Carl Icahn argues that with the company's massive cash hoard, its true market valuation is already in the 10-figure range.
If you're wondering, for Apple to reach that milestone, its stock price would have to rise another 43 percent from these levels to $171 per share.