Now that Apple has breached the threshold and become the most valuable company ever traded on a stock exchange, there surely will come a flood of articles decrying Apple's massive weighting relative to other companies that produce and sell goods and services that are perceived to be more vital to our wellbeing than phones, computers, and music players.
At yesterday's close Apple's market capitalization stood at $614.48 billion dollars. Market capitalization is simply the price of the stock multiplied by the number of shares a company has outstanding. As such, price is a major determinant. Daily pricing results from many factors but the most important factor has to be earnings, both present and future. Since Apple does not carry a wildly inflated p/e, (meaning that investors are not paying a disproportionate price for every dollar of Apple' s earnings), the current price is supported by present earnings. Therefore, Apple's current market cap also is justified by the company's earnings.
Apple is eating whole companies and industries alive and I think we can posit that much of Apple's market cap growth has come at the expense of the companies with which it competes: Dell, Research in Motion, Hewlett Packard, and Nokia. Each of these four companies achieved peak market cap in either late 2007 or in 2008, sometime after the introduction of the iPhone. Have a look at this chart:
At the end of September 2007, Apple's market cap was $133.46 billion. The investment community has since added $481.02 billion to Apple's market capitalization. The four companies above have lost a combined $362.49 billion in market capitalization since the dates of their respective peak valuations, valuations achieved shortly after the iPhone made its debut.
More proof that money goes where it is treated best, as they say on Wall Street.
Disclosure: I am long AAPL.