APPLE: Apple (AAPL) is the largest publicly traded stock in the world. Its $2.5 trillion market capitalisation is $300 billion ahead of runner up Saudi Aramco (SAOC). The difference alone equals the market value of Chevron (CVX) or Home Depot (HD). Apple has a 7% weight in the S&P 500 index. More broadly, the top-10 S&P 500 stocks represent 28% of the index, one of the highest levels of concentration ever. This makes next week’s new product event a must watch for Apple and its massive global supply chain. Yet it is not the biggest stocks that have been leading the market. This is a welcome victory for market breadth and diversification, and a support.
‘FAR OUT’: Apple is holding its ‘Far Out’ product launch event next Wednesday, September 7th. The unveiling of the new iPhone 14 and new watches is expected. This is important for the company and its big supply chain. iPhone’s are 49% Apple revenues. ‘Wearables, home, and accessories’ are a further 9.7%. This also impacts its 100+ company supply chain, from Amkor Tech (AMKR) and Corning (GLW) to Texas Instruments (TXN) and Western Digital (WDC).
LESS CONCENTRATION: We track the impact of mega-cap stocks, like Apple, on the S&P 500 by comparing vs its equal-weighted version (see chart). This neatly shows the era of tech mega cap dominance in 2019-2020, followed by the broader Value-driven covid recovery rally. This gap has stabilised this year. Smaller sectors like energy and utilities have led S&P 500 outperformance. Whilst the breadth of the summer rally remains a significant technical support.
All data, figures & charts are valid as of 01/09/2022