Investing

Just how impressive is Apple's $2 trillion market cap? These 4 charts make it clear

Now the world's largest company, the tech giant beat out Microsoft and Amazon to become the first in the U.S. to hit the milestone.

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On Wednesday, Apple became the first U.S. company to hit $2 trillion in market capitalization, just over two years after it became the first U.S. company to reach $1 trillion.

Market capitalization, or market cap, is the total dollar value of all of a company's outstanding shares of stock. In more colloquial terms, it's the company's market value or what it is worth. You calculate market cap by multiplying the share price by the number of outstanding shares.

Like other tech companies, Apple has benefited from stay-at-home orders and the increased reliance on technology.  Revenue for the company's third quarter, which ran from April through June, increased 11%. Apple's share price has shot up 23% since it announced the better-than-expected earnings and a 4-for-1 stock split on July 30, and it has more than doubled from its recent low in March.

The day after the earnings announcement, Apple surpassed Saudi Aramco to become the world's most valuable publicly traded company.

Apple's market value really began to take off in the mid-2000s in response to the success of its new Mac computers. The release of the first iPhone in 2007 and iPad in 2010 propelled the share price higher. Apple's market cap was just over $100 billion when the iPhone was announced.

While the 2010s were a historically successful decade for stocks, Apple far outperformed the overall market.

Apple dominated the past decade
Over the past 10 years, Apple has grown over 1,225%. The S&P 500 grew just over 210% in the same time.
Social chart title
Note: Data through August 20.
kiersten schmidt/grow YCharts

In late 2011, Apple began dominating the market. For 89 of the 109 months since September 2011, Apple has been the most valuable company in the U.S.

Tech giants take over
At the beginning of the last decade, Exxon Mobil reigned supreme, but since 2013 Apple and other big tech companies have dominated the market.
Market cap of the largest company in the S&P 500
Social chart title
Note: Data through August 20.
kiersten schmidt/grow YCharts

This latest achievement by Apple highlights just how much tech has ruled the market over the past few years. Microsoft, Amazon, and Google parent Alphabet also have valuations over $1 trillion.

Those four companies, plus Facebook, now make up more than a quarter of the total value of the S&P 500.