Microsoft, Apple and Google the Three Most Valuable Stocks on Trefis

by Trefis Team
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Among the stocks covered by Trefis, Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) stocks have the highest total valuations.  We estimate that these three companies together account for more than $760 billion in value.

Trefis Values Microsoft at $287 Billion

Microsoft is the most valuable company on Trefis with a valuation of about $287 billion.  This translates into more than $32 per share for Microsoft’s stock.

Microsoft primarily derives its value from license sales of the Windows operating system, which contributes about $93 billion (or 32%) to the company.  This large value can be attributed to Microsoft’s high market share of Windows in PCs.

We estimate that in 2009, Windows claimed about 74% market share amongst PCs sold.  This figure factors in piracy of the Windows operating system and use of Windows amongst PCs is higher than the market share figure suggests.

Another $87 billion (or 30%) can be attributed to license sales of Microsoft Office.  Windows and Microsoft Office together account for $180 billion of value for Microsoft.  In comparison, $180 billion forms the total value for Oracle (NASDAQ:ORCL), the sixth most valuable technology company covered by Trefis.

Trefis Values Apple at $247 billion

We estimate Apple’s value to be about $247 billion, making it the second most valuable company on Trefis. This translates into $267 per share for Apple’s stock.

Apple’s stock derives most of its value from the iPhone business, which contributes about $127 billion (more than 51%) to the company’s value.  Apple has successfully gained mobile phone market share while maintaining premium pricing for the iPhone.  We estimate that the iPhone has captured 2% of the mobile phone market since its launch, while its share in smartphones is much higher.

Trefis Values Google at $228 billion

We estimate Google’s value to be about $228 billion, making it the third most valuable company on Trefis.  This translates into $705 per share for Google’s stock.

Google derives its main value from search advertisements that contribute about $155 billion (68%) to the company’s total value.  Search advertisements are contextual in nature, which means that the ads are specific to the keywords typed by the user in the search engine.

The high value of the search advertising division can be attributed to Google’s success in gaining search market share. Google increased its worldwide share of searches from 45% in 2005 to 65% in 2009.

For additional analysis and forecasts, here are our complete models for the stocks of Microsoft, Apple and Google.

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