Apple, the most valuable company in the world

After overtook Microsoft last year, the market capitalization of Apple continues to soar with their stock hitting the historical new high. Their stock was priced at $300 last October and in less than a year, the stock price reached $400. After few weeks of swapping the top spot with Exxon Mobil, the company now stays in the lead and become the most valuable public listed company, with the value of $370 billions. The company's $75 billions financial reserves, which were greater than US Government back in July this year, serves as the strong war chest for their strategic acquisition. This amount is more than the market capitalization of Hewlett Packard.

Starting from the company with a goal to produce user friendly computer, the company has transformed into consumer electronic company after the return of Steve Job. The company now owns its own operating system and its own hardware (A4, A5 and A6 processors), which allowing it to fully integrate hardware and software in its products. That's part of the reason that Apple delivers such great user experience. Owning the operating system also means Apple doesn't have to pay license fees, which have better margins. And if you think about people with iPads, iPhones or iPods, you've got all your music in iTunes, you've got all your apps from Apps Store and there are apps that are only available on Apple products. So, when you buy your next phone or first tablet computer, it's much easier to buy an Apple product again and just transfer all your data to the new Apple product, as opposed to completely replacing it with an Android product and having to start from scratch. So, I think there's some stickiness to the operating model which should work well for them going forward.

Consider this landscape, Microsoft makes money by selling an operating system threatened by Google's Android, which is free. Microsoft also has little control over its customer, computer makers, who are slashing prices in a race to the bottom that can't good for Windows revenues. Google makes money from advertising, but gives away its operating system to boost its search business. Only Apple, has a cohesive system, with each part adding to the value of the whole.

With little challenges from the competitors in the tablet, and the Oct 4's release of next generation iPhone, the revenue and the profit will continue to grow. Furthermore, the company seems possess great resistant to global economic turbulent. With these factors, Goldman Sachs analyst seeing the company have great potential to outperform their previous expectation, and lifting Apple's 12-month target price from $480 to $520.

The rising trend after release of iPad 2

The release of second generation of iPad has lead the rise in number of stocks. Firstly, of course the company itself, Apple (AAPL), closing at $359.56, a jump of more than 2 percent from 2 March closing price. The appearance of Steve Jobs in this major product release, although he still looked weak, but that might have boast the confidence of investors, and destroyed the rumor of his dying condition. 

A year ago, iPad received a rather bad justification from the industry when it was announced; The industry don't see the need of having a device that categorized between a PC and mobile phone. People think that might be the end of Steve Job's innovative gadget. BUT, today, we have seen how popular this device is; the other big brothers, like Samsung, HP, Motorola start targeting this new category, and we will see more tablet coming soon in 2011. In the meantime, the netbook category might have started falling out of favor by the industry.

The release of iPad 2 and Verizon iPhone 4 have brought a great fortune for their component suppliers as well. Qualcomm (QCOM), the provider of iPad and iPhone baseband chip, rose to $58.84, up around 3 percent. With now the support of both GSM and CDMA networks, the dual-switch baseband chip definitely provides a great revenue to Qualcomm. Next we have Cirrus Logic (CRUS); it closed at $24.98, rise more than 7 percent. This usage of this audio chip was first revealed in the tear down report of iPhone 4, since then its share is in the rising trend. The company has their audio chips in both iPad and iPhone product lines and foresee the company will continue grow fast with their largest customer. Lastly, the NAND flash provider of iPad and iPhone, Micron (MU). After struggling for a couple of years, the Micron finally return to profit in the last quarter. The NAND flash as well as the memory chips in MacBook series will continue driving more profit for the company. In fact, Seeking Alpha recently pointed out that shares are among the cheapest in the semiconductor arena. Micron closed at $11.57, went up more than 4 percent from previous day's close.

All the 4 stocks are traded close to their 52 weeks' high, and traded slightly above 20 SMA. Should unrest in Middle East and Africa relieve and better economic outlook, these stocks will continue to rise.