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
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- What’s Microsoft’s Fundamental Value Based On 2015 Results?
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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
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
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.