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Commentary

Should I Buy Apple Stock Now?

What you have to believe to justify the high valuation that the market is placing on Apple's stock.

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Ranked by its $2.2 trillion equity market capitalization, Apple (AAPL) is the single-largest constituent of the Morningstar US Market Index. Its weight in the index is 5.6%, almost a full percentage point greater than the second-largest, Microsoft (MSFT), and 2 percentage points greater than the third-largest, Amazon.com (AMZN). In fact, following the combined market cap of Alphabet’s two share classes, (GOOGL) and (GOOG), Apple’s market cap is equivalent to the combined total of the next four-largest companies: Tesla (TSLA), Facebook (FB), Berkshire Hathaway (BRK.A), and Johnson & Johnson (JNJ).

As such, Apple’s stock price has an outsize impact on overall market valuation. And the gap between its market value and other giants has widened, with Apple’s share price outpacing Amazon.com, Microsoft, and Google over the past year. This impressive run has left many investors wondering if more gains still lie ahead, asking: Should I buy Apple stock?

David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.