The race to a $1 trillion market cap

As the stock market continues to boom into new highs (congrats to the Dow hitting 25,000 again, pre-congrats for hitting 26,000 by the end of next month probably) two particular publicly traded companies are nearing a $1 trillion market capitalization. FAANG components Amazon and Apple. The stocks have all provided phenomenal returns last year. They’re market capitalization are within $750 billion - $900 billion, Which begs the question, who will reach a trillion first? 

Amazon's case

Analysts are bullish

Analysts are giving Amazon a strong buy, however, Amazon is slowly reaching their consensus price set by analysts. Around $1,700 making the company worth roughly $825 billion. Nonetheless, plenty of folks want to get in on this stock. If the stock returns the same returns it did back in 2017, which is around 55% it can surpass $1 trillion in market cap. 

Amazon does acquisitions

There is never a year where Amazon does not do an acquisition, usually, they acquire businesses that make them well diversified or help the underlying business for Amazon. 

Amazon must hit...

Amazon must see a share price of $2,016 in order to surpass $1 trillion in market cap or a 33% increase in share price

Apple's case

They have how much in cash now?

As I am writing this, Apple is currently at an $896 billion market capitalization, with about $250 billion in cash, net income (as of last year) of $48 billion.

 Apple's 10-K, that's a lot of fucking guac

Apple's 10-K, that's a lot of fucking guac

Needless to say, this company is stacked, while much of the cash is outside of the U.S it will be easier to bring it back home with this new tax reform and could mean for larger share buybacks or acquisitions. Just like the rumored acquisition of Netflix to compete with Amazon's prime video

Apple does not do "big" acquisitions

However, Apple rarely does HUGE acquisitions, in fact, the last one it did was purchasing Shazam, the software that can identify films, songs, commercials, etc. for $400 million in December of 2017. A complete rip-off to the pioneers of music start-ups since Shazam is worth far more than just $400 million. Anyway, it's largest in history was acquiring Beats for $3 billion. This whole rumor on Apple purchasing Netflix seems unlikely as they need about $100 billion to outright purchase Netflix. It seems far smarter if Apple created their own TV/movie streaming service. 

Analysts are bullish on Apple

12-month price target is $204 and a consensus of $192. Pretty bullish if Apple closed at $176.19 today. With the majority of the analysts giving Apple a strong buy. Bullish sentiment. The news for the decrease demand for the iPhone X is making Apple investors feel iffy on the companies profits in the following quarters. 

Apple analyst.PNG

Apple must hit...

Apple must hit a share price of $197 per share or 11%, keep in mind, analyst are expecting a price target of $204, far beyond the share price they need to hit to reach $1 trillion. 

Conclusion

I'll have to place my money on Apple, their stock price doesn't have to move much in order to hit a $1 trillion market cap, despite low demand for the iPhone X, they can make up those profits elsewhere in their different services. If everything goes well, then it shall be the first publicly traded company that hits it.