Apple Inc. is now a $2 trillion company

Apple has become the first US company to hit a market cap of $2 trillion. It’s an arbitrary milestone but a significant one all the same, testimony to the pandemic-defying performance of the iPhone maker. It’s also been just two years since Apple hit a $1 trillion market cap, meaning the company has essentially doubled in value in just over 24 months. Apple is not the first company in the world to hit the $2 trillion benchmark. Saudi Aramco, the gas and oil giant headquartered in Saudi Arabia, did so first. Aramco briefly hit the $2 trillion mark in December 2019 but has since dropped below that figure as its stock price wavers.

Apple surpassed it as the world’s most valuable company on August 4th, 2020. Today, shares in the company crossed the $467.77 mark that gives Apple the $2 trillion valuation, as reported by the Financial Times. But they may well dip below that in future. Shares in Apple have been on a tear for years, but they’ve performed particularly well in 2020, gaining by more than 50 percent, despite the disarray caused by COVID-19. The company’s stock has gained, on average, 3.5 percent every week since the beginning of June, reports The Wall Street Journal. And its share price jumped significantly after its most recent earnings report in July, where the company reported record sales and a total of $59.7 billion in revenue up 11 percent compared to the same quarter last year. But although revenues are booming, Apple is facing a string of regulatory headwinds regarding the ecosystem of apps that underwrite its hardware. Most notable of these is the legal challenge from Fortnite creator Epic Games, which is currently suing Apple for kicking Fortnite off iOS after Epic tried to circumvent Apple’s payment systems. Part of Epic’s complaint (and one echoed by many other companies who reach customers through Apple’s App Store) is that the company’s 30 percent cut on transactions is extortionate. Along with Apple’s growing revenue from its services and its reported plans to launch various subscription bundles later this year, this shows how the iPhone maker’s future depends not just on its hardware, but on the software that keeps customers loyal. The iPhone got Apple to $1 trillion. Services, arguably, got it $2 trillion. What can keep it there?

Walmart, Home Depot May Show Retail Strength Amid Pandemic

As the coronavirus pandemic lingers, virus-wary consumers are sticking with their favorite retailers while consolidating their shopping trips. This trend is benefitting some of the largest US retailers which are bucking the general economic downturn. This week, investors will get a deeper look into their financial performance when some of the biggest US retailers release their second quarter earnings reports. Home Depot: Store Modernizations, Upgraded Digital Options Home Depot (NYSE:HD) is scheduled to report Q2 2020 earnings on Tuesday, Aug. 18, before the market opens. Analysts are expecting a projected EPS of $3.6 on sales of $34.08 billion. Home improvement companies have outperformed the broader market this year as Americans put additional money into enhancing where they live as they shelter in place. Shares of the Atlanta-based retailer have surged about 30% this year, compared with the gain of just a little over 4% for the broader S&P 500 Index. The stock closed on Friday at $280.55 after hitting a record high earlier in the week. These positive growth trends were behind an impressive Q1 earnings report in May when sales rose more than expected and customers, on average, spent 11% more at HD stores than they did during the same period a year earlier. Analysts expect this trend to continue as a growing number of people leave big cities and move into the suburbs, a way of fleeing crowding which exacerbates the COVID-19 crisis. Just before the deadly pandemic hit, Home Depot was reaping the rewards for its $11-billion spending to modernize the company’s stores, upgrade digital options and enhance offerings for its key trade customers.

Sales from Home Depot’s digital platforms grew by about 80% in the first quarter as customers opted for online shopping over in-person browsing during the pandemic. As well, the strength of the US housing market should also help Home Depot thrive once the COVID-19 outbreak is contained, as lower borrowing costs boost home sales, making it easier for homeowners to increase spending on renovations. Walmart: Expanding Customer Base America’s biggest retailer, Walmart (NYSE:WMT) will also report second quarter earnings on Tuesday, Aug. 18, before the open. Consensus anticipates EPS of $1.25 on revenue of $135.29 billion. At a time when people are mostly staying home and consuming more mundane, daily staples, Walmart’s large brick-and-mortar presence has likely helped the Bentonville, Arkansas-based retailer to further expand its customer base and appeal. Hefty investment in e-commerce, steps toward growing its health care business and some added benefits for its 1.5-million strong workforce are a winning combination that has positioned the mega retailer to supply large swaths to the nation as governments and other businesses grapple with how to respond to the unprecedented health and economic threat. With the expectation the retail giant will report strong quarterly earnings and growing online sales, investors have pushed WMT shares higher by 12% this year. The stock closed up 0.6% on Friday at $132.60. As the coronavirus pandemic forces more consumers to pivot to online shopping, media reports indicate the retailer might soon launch a membership service called Walmart+, which would to compete with Amazon's (NASDAQ:AMZN) Prime. The lingering public health crisis offers a window of opportunity for Walmart to entice, and potentially lock-in, the swelling number of online shoppers through a membership program with speedy delivery and other perks. According to Bloomberg, citing a survey from Credit Suisse analysts and researcher Numerator, five million customers could join Walmart+ off the bat. The potential audience for the service could be as large as 20 million, the report says. Amazon’s Prime program, by contrast, has more than 118 million members in the US, according to Consumer Intelligence Research Partners. Bottom Line While both retailers are forecast to show improvements in their sales, their bottom-line profitability might get squeezed by the costs associated with higher worker pay and benefits, along with protecting customers during the coronavirus pandemic. That said, comparable sales and each vendor's online expansion will be the two critical numbers investors should focus on.

Samsung’s Profits Are Up Despite Pandemic

Samsung posted better than expected earnings for the second quarter of 2020, with operating profit up 23 percent year-on-year to 8.15 trillion won ($6.84 billion) despite a 6-percent fall in revenue. The Korean conglomerate says it experienced a greater recovery from the impact of COVID-19 than it had initially forecast and managed to optimize its expenditure, even though sales of devices like smartphones were down from last year.

Samsung expects smartphone sales to rise next quarter due to the launch of the Galaxy Note 20 and an unnamed foldable phone, likely the leaked Galaxy Z Fold 2. Its display business, which supplies panels for other device makers, saw demand fall but had earnings boosted due to a “one-time gain.” This is understood to be a compensatory payment from Apple after the US company ordered fewer iPhone panels than expected; Bloomberg notes that analysts peg the amount at about 1.1 trillion won ($924 million). Samsung’s all-important chip business is seeing mixed results during the pandemic. The shift to working from home means demand is strong for DRAM used in data centers and PCs, but down in mobile devices. It’s a similar story with NAND, where server SSD sales are growing as cloud usage rises, but slumping smartphone sales mean overall storage shipments are down. Still, the semiconductor division overall accounted for two-thirds of Samsung’s operating profit for the quarter.