Apple Passes Google's Stock Price

It's hard to run out of superlatives when it comes to Apple, as this consumer tech company continues to rewrite the rules about what companies can achieve. The latest target in sight? Overtaking Google when it comes to the magnitude of its stock quotation.

Are Stock Prices Really Relevant?
, other well-known names like Amazon, AOL and eBay all boasted triple-digit stock prices. Even General Electric once sported a triple-digit price.

So what happened? Many of these companies split their stock and all of them saw significant share price erosion as tech stocks crashed from the peaks. The triple-digit stock prices didn't cause the businesses to struggle, but they were a sign that the market's enthusiasm ramped up considerably faster than the company's financials. That may lead investors in stocks like MasterCard or Chipotle to reflect a bit on their market performance and valuations.

Whither Apple?
In the limited history of large tech companies, market value leadership has been a mixed blessing. Microsoft held the top spot off and on for a few years before, frankly, getting too big for its own good and seeing growth fall off. Likewise, commodity companies have risen to the top only to be knocked off when commodity prices cycle down again.

As Apple gets larger and larger, it will find that there are simply fewer and fewer market opportunities large enough to keep revenue growing; delivering 20% growth on a revenue base of $50 million is a much different prospect than growing 20% from a base of $100 billion. Sooner or later, that growth is likely to slow and valuation multiples will shrink even faster, meaning that Apple will still be a major tech player (as IBM and Microsoft both still are), but won't enjoy the same eye-popping valuation.

The Bottom Line
So while the fact that Apple now trades for over $600 a share means relatively little for the business, the fact that it trades at over four-times sales may mean a little more for investors. While Apple's valuation tops the charts, it trails many companies like Wal-Mart, Exxon and Daimler in terms of revenue. If Apple can somehow build a car company-like revenue base, even further growth could be possible.

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