Apple was already the world's most valuable company. The gap between it and No. 2 Exxon Mobil Corp. has widened rapidly in the past month, as investors have digested Apple's report of blow-out holiday-season sales of iPhones and iPads. And, more recently, Apple has raised investors' hopes that it might institute a dividend.
The company's market capitalization was near $506 billion in late-morning trading as the shares rose $7, or 1.3 percent, to $542.41.
On Tuesday, the Cupertino, Calif., company sent out invites to reporters for an event in San Francisco Wednesday, apparently to reveal its next iPad model. The launch of the new model was expected around this time, a year after the launch of the iPad 2.
Apple is in rare company. It is the sixth U.S. corporation to reach the $500 billion milestone, and the only one to be worth that much at current prices.
Exxon, now worth $411 billion, was worth just over $500 billion for two short stretches at the end of 2007.
Apple's arch-nemesis Microsoft Corp. was worth just more than $500 billion briefly at the end of 1999, and again in early 2000. It even shot up above $600 billion for one day. The company is now worth $267 billion.
Cisco Systems Inc., Intel Corp. and General Electric Co. also peaked just above $500 billion in early 2000. Cisco and Intel are now worth a bit more than $100 billion each, while GE is worth $200 billion.
Exxon's ascent to the $500 billion level was propelled by record oil prices. Cisco, Intel, Microsoft and GE were boosted by the general stock mania of 1999 and 2000, and the hunger for technology stocks in particular.
Apple's rise, by contrast, is powered by its mammoth sales and profits, which are growing at rates unheard of for a company its size. And despite its sky-high market capitalization, Apple's shares aren't expensive compared to its earnings. It's worth 15 times its earnings for the last year. That compares to 21 times earnings for Google Inc. and 14 times for the S&P 500 overall. Yet few companies in the index grow their earnings as fast as Apple does: In its latest quarter, its earnings rose 118 percent from a year ago, to $13.06 billion.
Analysts expect the Apple rally to have some legs. The 35 analysts who have reported to FactSet since Apple's latest earnings report have set an average price target of $592 per share, or 8 percent higher than Wednesday's level. That implies a market capitalization of $552 billion.
Apple has been helped by a general recovery in the stock market after the doldrums of the financial crisis and the recession. The S&P 500 index has posted its best February performance in 14 years, and on Tuesday, the Dow Jones industrial average closed above 13,000 for the first time since May 2008.
Apple's stock accounts for 3.8 percent of the value of the S&P 500, according to Standard & Poor's, and it made up 6 percent of the operating income of the 500 companies in the fourth quarter.
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