SAN FRANCISCO. — Apple’s market capitalisation touched a record-breaking $700 billion on Tuesday, as strong iPhone sales and anticipation of new products pushed its shares to more than double the point at which Tim Cook took over as chief executive.

The momentum behind the iPhone 6 and its growing prospects in China have seen Apple’s stock set several successive all-time highs in recent weeks, after passing the $100 mark back in August.

At an intra-day peak share price of $119,75 in morning trading on Tuesday, the world’s most valuable public company’s market capitalisation exceeded its nearest rival ExxonMobil by almost $300 billion. Apple’s stock market worth also stands far ahead of Microsoft and Google, both of which are currently valued below $400 billion. Its shares closed at $117,61, down 0,86 percent.

After swinging from September 2012’s high above $100 to a low close to $55 in April last year, the magnitude of Apple’s rally can be seen from both near- and long-term perspectives.

Its stock price has increased tenfold since the iPhone was first announced in January 2007, while it has risen almost 50 per cent so far this year.

It has gained more than 20 percent since mid-October, when the company released its latest earnings report, which surpassed Wall Street forecasts.

Hedge funds have ploughed money back into Apple in recent months, making it their top holding in the third quarter, according to a recent study by Goldman Sachs.

The $700 billion mark is the highest for any US company in nominal terms, although Apple still lags behind Microsoft’s inflation-adjusted 1999 peak of $874 billion. Even so, analysts say Apple still trades at a discount to the average of the S&P 500, despite its combination of growth and yields through dividends and share buybacks.

Apple’s prospects have risen in tandem with Samsung’s struggles in the higher end of the smartphone market. The Korean electronics company is preparing to change its handset strategy and shake up its top management after reporting last month that third-quarter operating profit fell 60 percent, largely due to a shift in sales mix from premium smartphones towards cheaper devices.

Walt Piecyk, analyst at BTIG Research, said that strong iPhone sales over the holiday period “will likely continue to drive [Apple’s] stock higher”.

“The iPhone 6 excitement is driving investor enthusiasm so much that many have forgotten that management has hinted about new product categories not yet announced that could help in driving future earnings growth,” Mr Piecyk said.

The $700 billion milestone has reawakened speculation among some pundits and investors, including activist and Apple shareholder Carl Icahn, that the iPhone maker could become the first trillion-dollar company.

However, most Wall Street analysts’ estimates fall far short of that mark. BTIG Research’s above-average price target of $135 implies a market value of just over $750bn, after adjusting for share buybacks.

Microsoft’s inflation-adjusted peak valuation in 1999.

While the iPhone 6 is driving much of Apple’s momentum, Mr Cook has overhauled its entire product range this year.

Early response to Apple Pay, the iPhone’s mobile wallet service, has been promising and analysts are starting to factor in the impact from next year’s Apple Watch.

A Morgan Stanley study found more people said they planned to buy the Watch than the iPhone or iPad ahead of their launch. Analysts at the bank predict that Apple will ship 30m Watches in the device’s first year on the market, with around 10 per cent of existing Apple customers buying the device, above the iPhone’s penetration but below the iPad at the time those devices went on sale.

With app installations spiking to a record high in October, according to app marketing company Fiksu, Apple is also preparing to use music streaming technology that it acquired with Beats Electronics to launch a new push into subscription music services early next year, as iTunes download sales decline.

“There are products we’re working on that no one knows about that haven’t been rumoured about yet,” Mr Cook, who succeeded Steve Jobs as chief executive in August 2011, told interviewer Charlie Rose in September.

Speculation about what those products might entail runs from the long-running prediction that Apple will try to revolutionise the television market to this week’s suggestion that it might be investigating virtual reality, after a job advertisement mentioning the technology and a series of patent applications for digital video goggles. — Wires

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