Apple becomes the first US trillion-dollar public company

Buoyed by a stronger than expected earnings report for the second quarter on Tuesday, Apple has become the first American company ever to be worth over $1 trillion. Shares of the iPhone maker closed at $207.39 Thursday, lifting the company’s market cap to about $1.001 trillion.

Shares of the company rose 3% Thursday, and are up about 31% over the past year.

Other tech giants have approached $1 trillion in market cap, but still lag behind Apple. Amazon’s valuation stands at around $877 million, while Alphabet’s net worth is $851 million and Microsoft is worth about $822 million. Facebook was also in the hunt for a $1 trillion market cap, until a stock collapse last week dramatically cut the company’s market cap to $504 million as of Thursday’s trading.

The first company to ever be worth $1 trillion was Petrochina, which reached the valuation briefly on its first day of trading, following its 2007 IPO. But that peak coincided with a Chinese stock-market bubble, and PetroChina’s shares would lose $800 billion in value over the next 10 years.

Apple’s fortunes, by contrast, seem brighter. Some market observers consider US tech stocks to be overvalued, but few think we’re in a bubble.

A company’s market cap is calculated by multiplying the number of shares outstanding by its stock’s share price. According to a quarterly report that Apple filed with the SEC on Wednesday, the company had 4,829,926,000 shares outstanding as of July 20, the most recent figure available. Based on that number, Apple’s stock needed to reach $207.05 a share to be worth $1 trillion, which it did today.

As Bloomberg pointed out, the number of shares outstanding has been falling about 1.3% per quarter as Apple buys back its shares. Companies typically do so when they consider their stock to be undervalued—or to return funding to investors. That also means the actual number of Apple shares may have fallen further since July 20, but most market observers go with the number reported in the 10-Q quarterly financial reports filed with the SEC.

Also noteworthy, Apple’s march towards a $1 trillion valuation is much of its own making through buybacks of Apple stock, as Bloomberg’s Dave Wilson notes:

Apple’s earnings show the company is in good financial health. Revenue rose 17% in the second quarter to $53.3 billion, while net income rose 40% to $2.34 per share. Analysts had expected Apple would report $52.4 billion of sales and $2.18 in EPS.