Apple — darling of retail investors and hedge funds alike— has been creating buzz in the market for years as it continues its meteoric rise. In February, the company's market capitalization moved above the $500 billion mark.
Apple is one of the few corporations to eclipse the $500 billion mark, although it is currently the only publicly traded company to exist above this value today, at $506.2 billion as of March 2, 2012. Five other companies have seen their value peak at over $500 billion, including Microsoft ($615 billion in December 1999), General Electric ($594 billion in August 2000), Cisco Systems ($557 billion in March 2000), ExxonMobil ($527 billion in October 2007) and Intel ($502 billion in August 2000).
These sky-high valuations are sometimes hard to grasp, since they occur so infrequently in the regular business world. So to grasp of how big Apple really is, here are several comparisons of the company’s $506.2 billion market cap and $97.6 billion in cash holdings. How much could Apple buy and what else is worth $500 billion? Click ahead to find out!
By Paul Toscano
Posted 2 Mar 2012
According to numbers from the World Bank,there are only 18 countries that have a GDP above $500 billion, while Apple’s market cap stands at approximately $506 billion. This means that Apple’s total value is greater than the 2010 nominal GDP of countries like Poland ($469.4 billion), Belgium ($469.3 billion), Sweden ($458.9 billion), Saudi Arabia ($434.6 billion). In fact, if you take the GDP of Poland, you could add the GDP of Costa Rica and still have a number lower than Apple’s market cap.
The value of the company is just slightly smaller than the GDP of Switzerland, which stands at $527.9 billion. If Apple’s total market value were ranked among country GDP, it would be the 18th largest in the world.
If you compared the value of Apple to the annual production of goods and services in major U.S. cities, the company is worth more than most of the country’s major metropolitan areas. Apple’s market cap makes it almost the size of Chicago’s gross metropolitan product (GMP), according to numbers from Greyhill advisors.
Using these numbers, Apple‘s total market value is about twice the size of Miami’s annual production ($257 billion) and far outpaces San Francisco ($325 billion), the city closest to Apple’s headquarters in Cupertino. Aside from Chicago, the only larger cities are New York and Los Angeles, by annual production.
It may surprise some to learn that if you took every $1, $2, $5, $10, $20 and $50 bill currently in circulation, you still would not have enough cash to purchase Apple.
According to the United States Federal Reserve, the total value of U.S. currency in circulation stood at $1.034 trillion at the end of 2011. A majority of this value is in $100 notes, of which 7.8 billion are currently in circulation.
The total value of all U.S. legal tender with a face value below $100 totals up to only $252.8 billion, which is less than half of the value of Apple’s current market cap.
Apple is currently the most valuable company on the planet, but how does it compare to other publicly traded companies? Compared to other computer makers, Apple is more 16.2 times more valuable than Dell ($31.1 billion) and 10.1 times more valuable than Hewlett Packard ($50.3 billion). Apple is about 2.5 times as large as Google ($202.1 billion) and a little less than twice as large as Microsoft ($269.6 billion). Apple’s valuation is approximately equal to the combined market capitalization of the 45 smallest companies in the S&P 500.
With $97.6 billion in its coffers, Apple has more cash on hand than its home state of California generated in tax revenue for its general fund in 2011. According to the California Department of Finance, California saw revenues to its general fund reached approximately $93.49 billion during fiscal 2010-11, which is $4 billion less than the value of Apple’s cash, short term and long term liquid investments.
The Apple coffers could also cover the state’s estimated $9.2 billion budget deficit more than 10 times over. With the 2012 state budget deficits accross the country estimated to be around $112 billion, Apple’s cash reserves could nearly wipe out the entire country’s state budget woes.
As far as individual U.S. public infrastructure projects go, nothing is bigger than Boston’s Big Dig, known officially as the Central Artery/Tunnel Project. With a price tag estimated at $14.6 billion, Apple’s total value could cover nearly 35 projects of similar size, while its cash reserves could pay for nearly seven Big Dig-like projects.
Saudi Arabia is the world’s largest oil producer. With more than 17 percent of the world’s proven reserves, the country’s total production in 2010 was 10.52 million barrels per day. With crude pricing at $107 per barrel at the time of this writing, it would take the country nearly 87 days of full production to generate as much cash from oil as Apple currently has.
If Saudi Arabia used all of its oil revenues to purchase Apple stock, it would take about 15 months to generate the $506.2 billion needed to purchase the company at its current value.
The New York Federal Reserve has more gold in its vaults than any other location on earth, with even more gold than Fort Knox. The New York Fed not only houses a portion of the gold holdings of the U.S. government, but also holdings of foreign governments and other institutions. Approximately 216 million troy ounces were located here as of 2008, according to public documents from the Federal Reserve. At $1,700 per ounce, the value of this gold would be $367.2 billion in today’s market, but still be less than the total value of Apple.
Among the world’s largest gold reserves held by countries and international organizations, no single country could turn in their gold holdings and receive a 100 percent stake in Apple, by today’s prices. Apple’s total value eclipses U.S. holdings by over $80 billion and is about three times larger than the value of gold held by Germany and the IMF, the world’s second- and third-largest holders of gold.
According to the CBO, the baseline budget deficit for the U.S. Federal Government was $1.296 trillion in 2011. If spending cuts during the year cannot match the expected deficits, the U.S. government will have to borrow money from the private sector and other countries through the sale of treasury securities.
To fill this gap, the U.S. government would need to have spending cuts and total borrowing equal approximately 2.56 times the value of Apple. With public debt outstanding increasing every day, the total amount stands at $15.48 trillion, a value 31 times that of Apple. Since January 1, 2011, the national debt has grown by $1.45 trillion, about three times the value of Apple.
Many investors question what Apple will do with its $97.6 billion of cash on hand, while government officials hope that Apple and other cash-rich companies will use this cash to help create jobs in the United States.
According to data from the U.S. Census Bureau, the average annual income for individuals in the United States during 2010 was $68,259. With Apple’s $97.6 billion, they could pay the salaries of about 1.43 million U.S. workers for an entire year. Although it would be a monumental task, this inflow of cash to the newly “employed” would reduce the national unemployment rate by more than 1 percent, making just a dent in the 12.8 million U.S. unemployment figure.
The country of Greece has been in the international spotlight in recent years for its overwhelming debt load and potential for default that could rock international financial markets. Austerity measures in the country and international pressures for financial reform have sparked widespread riots and strikes as the country tackles its debt problems. Greece’s debt is estimated at approximately €350 billion, or $462 billion — just under the total market value of Apple.