Apple’s $2tn-plus value overtakes the entire FTSE 100

Apple has notched up another milestone by overtaking the combined market value of the entire FTSE 100 index of the UK’s biggest publicly listed companies.

The iPhone and iMac maker has had a stellar performance this year with its share price rising an astonishing 75%, and last month it became the first US company to reach a $2tn (£1.48tn) market value. It has since climbed even further, reaching a new record of $2.268tn (£1.69tn) in early US trading on Tuesday.

In contrast London’s blue-chip companies, from Shell to HSBC, have lost nearly a quarter of their combined value since the start of the year. On Tuesday the FTSE 100 was down by 1.7% to 5862, its lowest level since the middle of May. In total the index is valued at £1.5tn.

The losses on Tuesday were partly due to a stronger pound, now up 18% since March’s low point, which damages the earnings of the exporters that dominate the FTSE 100. Analysts also pointed to an element of catch-up, since the London market was closed on Monday when its European peers experienced losses.

But the index has also missed out on the technology boom seen in the US and elsewhere during the coronavirus pandemic.

Businesses in tech and e-commerce, from Apple and Amazon to online retailers, have benefited from consumers turning to digital services for entertainment and shopping while stuck at home during lockdown. The FTSE 100 is light on technology businesses and heavily populated by companies badly affected by the pandemic in sectors including property, aviation, hospitality and bricks-and-mortar retail.

Neil Wilson, chief market analyst at Markets.com, said: “The FTSE 100 is a dinosaur, full of rather lumbering old-world stocks with precious little growth to offer. The FTSE 100 is a very good proxy for the global economy, which we know is on its knees. And if not exposed to the global economy (non-sterling earners), then they are fully exposed to the UK economy (eg Lloyds, RBS), which is doing worse than peers, we think.”

Apple nudged past the value of the FTSE 100 after completing a 4-for-1 stock split on Friday, meaning more shares on the market but also making them “more accessible to a broader base of investors”, as the company put it. One share costs $130 compared with about $500 last week.

Apple, co-founded to sell personal computers by the late Steve Jobs in 1976, became the first US company to be valued at $1tn by Wall Street in 2018, 117 years after US Steel became the first to reach $1bn.

After hitting tough times in the 1990s, Apple has stayed at the vanguard of tech and media innovation, launching a string of hit products. In the next few weeks Apple is to launch the iPhone 12.

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Tim Cook, who took over as chief executive when Jobs stepped down in 2011 owing to deteriorating health, has presided over an almost ninefold increase in Apple’s share price. Last month, the 59-year-old Apple executive became a billionaire.

Apple’s push into wearable products, such as the Apple Watch and AirPod wireless headphones, and services, including Apple Music, has paid off, making more than $13bn in the last quarter alone. An estimated 550 million consumers pay regularly for an Apple service, while more than 1 billion own an iPhone or iPad.

Apple is embroiled in a legal action with Epic Games, the maker of the hugely popular Fortnite game, after it was removed from their app stores for violating Apple’s strict payment guidelines.