Tech Trio Races Toward $1 Trillion Valuation on Cusp of Earnings

(Bloomberg) -- Wall Street’s three biggest names have their sights set on $1 trillion.

Apple Inc., Amazon.com Inc. and Microsoft Corp. are within striking distance of that market valuation, thanks to year-to-date rallies that range between Microsoft’s 23 percent and Apple’s 32 percent.

All three companies are scheduled to report quarterly results over the next week, and good news could lift any of them above that psychologically important -- if otherwise incidental -- valuation.

Microsoft will be the first to make a run at joining the 13-digit club; it reports third-quarter results after the market closes on Wednesday, and options set to expire on Friday point to a potential move of 3.5 percent. A rally of that magnitude would leave it shy of $1 trillion, however, as its current market cap of $959 billion means it would have to gain 4.3 percent to reach that level.

It appears that options traders are leaning bullish into the report, though, with near-term call options outweighing put options by 38 percent. The stock closed at a record on Tuesday.

Amazon’s results are scheduled for Thursday post-market, and it has a slightly wider gap to close. Given the e-commerce company’s current market cap of $943 billion, it would have to rise 6 percent; the implied one-day move after earnings points to a move of 4.6 percent, according to Bloomberg data. Amazon briefly traded with a valuation above $1 trillion last year.

While all three companies have held the title of largest U.S. stock at some point in 2019, Apple is the only one to have spent much time above the $1 trillion valuation. However, it hasn’t done so since November, when concerns over iPhone demand and other issues started a decline from which it has yet to recover. Shares remain nearly 11 percent below their record close.

Apple’s results will be released Tuesday afternoon, and based on its current market cap of $978 billion, it would have to rise 2.2 percent to return above $1 trillion.

--With assistance from Gregory Calderone.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Brad Olesen, Steven Fromm

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