PUBLISHED: 20:26 EST, 26 March 2012 | UPDATED: 01:54 EST, 27 March 2012
Apple’s success at selling consumer gadgets has made it the most valuable firm in the world.
As a result, stock market analysts have been trying to size its impact on the broader market.
In an attempt to analyse the market sans-Apple, Barclays Capital has produced a graph which illustrates the earnings growth of the technology sector with – and without – Apple (AAPL).
Shocking: The graphic shows that earnings without Apple have actually been in decline since spring 2011
The graphic shows that earnings without Apple have actually been in decline since spring 2011.
Eddy Elfenbein, who runs financial blog Crossing Wall Street, Tweeted: ‘In Q4, the tech sector’s earnings growth was 19.6%. Sans $AAPL, it was 3.3%.’
This method of illustrating the stockmarket star’s power was started by Jonathan Golub of UBS, who published two versions of his quarterly forecast in February – one for the S&P 500, and the other for the S&P 500 ‘ex-Apple’.
In his calculation, the market strategist said the S&P 500’s Q1 2012 earnings were on track to rise 6.8 per cent with Apple, but would decline to 2.8 per cent without.
In demand: Shares of Apple have nearly doubled from the $310 they hit in June 2011, and at about $600 a share are up nearly 48 percent in 2012 alone
‘By stripping away that one single company,’ Golub told the Wall Street Journal, ‘it is like seeing light through a prism — you see things more clearly.’
When the S&P 500 was looked at through Golubs’ lens last week, the results were even more astonishing.
According to Dan Sanborn of Ned Davis Research, the index’s total earnings growth dropped from 7.8 per cent year over year with Apple to just 2.7 per cent without.
Shares of Apple have nearly doubled from the $310 they hit in June 2011, and, at about $600 a share, are up nearly 48 per cent in 2012 alone.
Apple, currently the world’s most valuable company by market capitalization, now has a weighting of 4.2 per cent in the broad S&P 500 portfolio, the benchmark against which the performance of most U.S. mutual funds are judged.
That means 4.2 cents of every $1 invested in a S&P 500 index fund will be allocated to Apple shares, before fees.