Back on May 23, 2007, I blogged that Apple (NASDAQ: AAPL) would become bigger than IBM (NYSE: IBM) within two years' time. In May, IBM sported a market capitalization of $158 billion and Apple was just getting ready to hit $100 billion in market value. Well, IBM has since reported its December quarter Monday, and it was excellent. IBM shares responded with a $5.53 move to the upside, leading the market out of the doldrums -- at least temporarily.
The big news, however, is that Apple, which has yet to report its December 2007 quarter (scheduled for January 22) is now bigger than IBM. Apple's market cap is now at $156 billion and IBM's is at $142 billion. It did not take Apple the two years to pass IBM as I had written. I kind of knew it back then, but did not want to be aggressive with my forecast.
I will be a bit more aggressive now and predict that Apple will surpass Cisco Systems (NASDAQ: CSCO) in the next few months, if not the next few weeks! Cisco currently has about a $3 billion market capitalization advantage over Apple: $159 billion vs. $156 billion. Remember, Apple has its Macworld User Conference set to start today, drawing an expected 50,000 professional software developers and Apple also has yet to report the December quarter too. It should be an outstanding number, both top and bottom line.
Cisco is a terrific company and its stock is a buy. Cisco is perfectly positioned globally to continue leading the networking sector. While its mega growth days are behind it, there is nothing wrong with solid growth. Apple continues to be a mega growth story for at least 2008 and probably into 2009 and beyond. Apple is still in the early days of its major product lines. The cycle for iPod, iPhone and the new Mac will last well into the next decade.
Apple was one of the 41 companies I highlighted in my book Baby Boomer Investing...Where do we go from here? as one of the great stocks for Baby Boomers to own for the next decade. I wrote the book in late 2006 and predicted that Apple would come out with a revolutionary cell phone. I was right on that count, but did not count on the new Leopard operating system and the catalyst it would serve for Mac sales. It's a win-win situation for users and shareholders.
Georges Yared is the CIO of Yared Investment Research and the author of Baby Boomer Investing...Where do we go from here?
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Reader Comments (Page 1 of 1)
1-28-2008 @ 6:56PM
john m said...
HP still much larger than Apple and will remain that way with those silly mac computers Apple seals
1-16-2008 @ 11:31AM
Jimmyc said...
Okay - AAPL now at: 139.8 Billion and dropping.
That didn't last very long... IBM's at 149.68 Billion.
Still think it will beat Cisco in the next few months (152.9B)?
Believe me, for what I have in AAPL stock I would love to see it; when will Cramer get on board? When will the market get over it's obsession with calling us lemmings? Its a great company!
1-22-2008 @ 3:27AM
Gumby said...
Thanks, butno thanks, I will stick with Crocs. Why put more money in Apple while we are concerned with global warming. Why not put money to fight global warming first instead of idiots with stereo in ears...