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Tim Cook, chief executive officer of Apple Inc., sets a remote control down while exiting the stage after delivering a keynote address during the Apple World Wide Developers Conference (WWDC) in San Francisco, California, U.S. on Monday, June 2, 2014.

David Paul Morris/Bloomberg

Apple Inc., already the world's largest company by market capitalization, hit a new record value: $700-billion (U.S.).

Shares of Apple rose 0.8 per cent to $119.59 at the start of trading in New York Tuesday, giving it a valuation of more than $701-billion, a milestone that no other U.S. company has ever reached. While Apple's stock has since declined so that its value is below the $700-billion mark, the iPhone maker is still about 1.7 times the capitalization of the world's second-biggest company, Exxon Mobil Corp. Exxon, which has lost about $43-billion during the five-month oil rout, has a capitalization of $401-billion.

Confidence in Apple has been growing since the company unveiled larger-screened iPhones in September, followed by slimmer and faster iPads in October. Chief executive officer Tim Cook is updating Apple's core products while also pushing users deeper into the company's digital world with the introduction of a mobile payment system called Apple Pay and a smartwatch that's slated for release next year.

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"Given Apple's significant portfolio refresh over the past three months, the lack of innovation from competitors and a constructive spending backdrop in the U.S. market, we believe Apple has opportunity to shine bright this holiday season," Brian White, an analyst at Cantor Fitzgerald, said Nov. 24 in a note to investors.

Apple has forecast revenue in the current quarter of $63.5-billion to $66.5-billion, compared with $57.6-billion during the October through December period in 2013.

Longest Rally

Apple is up 48 per cent this year through Monday, heading for its sixth straight annual gain. That would be its longest streak ever, topping a five-year rally from 2003 to 2007. Its market capitalization reached as high as $658-billion in September, 2012, before a 44-per-cent plunge in the stock price over the next seven months.

Winners from the stock rise include Vanguard Group Inc., which was the biggest holder of Apple shares as of Sept. 30, with 327 million shares under management. Vanguard was followed by BlackRock Inc. and State Street Corp., which both hold more than 240 million shares of the company.

Apple Sellers

Others have sold off Apple. David Einhorn, the hedge fund manager who runs Greenlight Capital Inc., trimmed his ownership of Apple stock by almost $5-billion during the past two quarters, Bloomberg data show. The company remains one of his largest holdings.

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Viking Global Investors LP and Global Thematic Partners LLC were among the investment firms to sell all of their remaining Apple shares in the third quarter, according to Bloomberg data. Calls to both firms inquiring about the share sales weren't returned.

Apple's market cap has exceeded that of Redmond, Wash.-based Microsoft Corp. since May, 2010. Microsoft now has a market capitalization of $393-billion. Apple's value also moved above that of Google Inc. in January, 2010. The operator of the world's most popular search engine currently has a market cap of $369-billion.

"If you look at Apple as a tech company, it's one of the most exciting out there with a solid revenue earnings stream going forward," Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York, said in an interview. He manages about $925-million, including Apple shares.

Technology Bullishness

Computer and software makers in the Standard & Poor's 500 Index have posted the third-largest gains among industries this year, besides health-care and utilities, rising 19 per cent. Technology shares have appreciated as plummeting global oil prices sap the value from energy stocks.

As a result, Microsoft's market value moved above that of Exxon earlier this month, briefly making it the world's second-largest company before the two companies resumed their previous rankings.

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Technology stocks have been aided by signs of an accelerating economy, as data from labour to housing have indicated the recovery was strong enough to weather weakness overseas. The industry has also gotten a boost from better-than-estimated earnings. About 85 per cent of technology companies that have reported third-quarter results topped analyst forecasts on earnings, while 67 per cent beat on revenue.

This bullishness on the technology industry has been reflected in exchange-traded fund trading. The Powershares QQQ Trust, the largest ETF tracking the Nasdaq 100 Index, has attracted more than $4-billion in fresh cash over four consecutive weeks of inflows.

Even as Cupertino, Calif.-based Apple rallies, it's not enough for some. Activist investor Carl Icahn has argued that Apple should be trading at $203 per share, giving it a valuation of $1.2-trillion, based on the company being on the verge of seeing tremendous revenue growth with its new products.

"We believe Apple remains dramatically undervalued," he wrote in an open letter to Cook on Oct. 10 when Apple's valuation was $603.6-billion at the close of trading on Oct. 8.

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