Apple nears $1trn valuation - but will the new dotcom bubble burst?

Apple is on the brink of becoming the world’s first ever trillion-dollar company, even as fears grow the tech industry could be on the cusp of another dotcom bubble.

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.