Apple nears $1 trillion valuation – but will the new dotcom bubble burst?

Tech stocks soar but experts predict
regulatory crackdown could cause a crash

One-Minute Read

The day after Apple’s annual software conference, the iPhone maker’s
market value soared to $950 after it unveiled a series of new
updates “which experts say maintain its grip on users” reports
the Daily Telegraph. It means Apple shares have
already climbed 18% this year.

Why is Apple so valuable?

Combined with continued support from Wall Street sage Warren
Buffet, CNN Money says “Apple is benefiting from
investor euphoria surrounding the tech sector broadly”.

The MSCI global technology index has reached a record high while
technology shares in Europe have hit levels not seen since the
dotcom boom in 2001.

Who else is benefiting?

Growth from the ‘big four’ tech firms Facebook, Apple, Amazon,
Alphabet (Google’s parent company) have also driven the Nasdaq to
an all-time high, and mirror similar gains among Asian tech giants
including Alibaba and Baidu in recent weeks.

One factor driving tech markets appears to be that “despite
their ballooning valuations, technology shares have been seen as
insulated from fears surrounding trade wars” says the
Telegraph.

Will it last?

CNBC warns that “tech stocks are flashing a
warning sign similar to before the dot-com bubble popped”.

“We can never know when the end will come. Still, there are
three critical signals to watch for” says Ruchir Sharma in a New York Times article
titled ‘When will the tech bubble burst?’

First, he says, a regulatory crackdown on tech giants as either
monopolies or productivity destroyers “could pop the allure of tech
stocks”.

Second is a tightening of monetary policy by central banks.

And third, if tech earnings to start falling short of analyst
forecasts, as happened in the heady days of the dotcom boom just
before it crashed.