Apple is now worth more than $2 trillion, yes trillion. Apple is worth more than the sum of every company in the Russell 2000 index of small companies.
Looking at this in terms of employees, there are almost 7 million people employed by the ~2,000 companies that make up the Russell 2000 index. Apple employs a mere 137,000 by comparison.
That’s some pig!
Exuberance in tech and mega-cap tech shares looks obvious to us. We recently questioned how Apple can be worth more than 3X what it was in 2015 when the company only makes about 6% more than it did in 2015. But Apple isn’t the only company whose value is confounding. The Nasdaq is loaded with them.
For some perspective on the exuberance, check out the chart below. We show the ratio of the Nasdaq Composite to the Russell 2000 Value Index. The Nasdaq is driven by glamour stocks like Apple, Amazon, Tesla, Facebook, etc. The Russell 2000 Value Index is full of small out of favor companies.
The only other time we’ve seen this level of divergence between these two indices was well into the dotcom bubble. The Nasdaq eventually collapsed under its own weight as is widely known.
Maybe this time is different though. Maybe pigs really can fly!