Is it a flash in the pan or one of those rare companies that defines an era?
Investors, analysts and business historians have been struggling in the weeks since Apple’s AAPL most recent earnings report to make sense of this corporate oddity: a mega-cap company ($487.1 billion) that grows like a start-up (first quarter earnings up 115.7%).
Since November, when it pulled decisively away from Exxon Mobil XOM , Apple has been the world’s biggest company by market capitalization — only the 11th since 1926 to achieve the top spot, according to Howard Silverblatt of Standard & Poor’s.
Silverblatt’s first instinct — like that of many analysts who follow the company — is to treat Apple as an exception, an anomaly that has temporarily distorted their financial models. So he pulls Apple out of his spreadsheets to point out via Barron’s that:
- The S&P 500 is up 1.55% over the last year, but would only be up 0.47% without Apple.
- The S&P 500 is up 8.24% year-to-date, but would be up 7.7% without it.
- The S&P 500 technology sector is up 9.81% since October 2007, but without Apple it is actually down 4.1%.
Silverblatt’s point is that without Apple, the economic recovery wouldn’t look so rosy.
But what if Silverblatt and the others have it backward? What if Apple, rather than being the exception, is the rule that defines a new era in business?
Previous market leaders, like GM GM and IBM IBM , he argues, were not there to make up for the deficiencies of the rest of the economy. They were the engines of growth for their era, redefining our ideas about marketing and productivity and changing business processes across whole industries. Similarly, he says…
It’s a fascinating argument, worth following in full. You can get it on Dan Benjamin’s 5by5 podcast network — The Critical Path, Episode 26: Zeitgeist — starting at the 41:15 mark.