On the day that Apple announced that pre-orders of the iPhone 5 had exceeded 2 million in the first 24 hours - twice as many pre-orders as the iPhone 4S, the company’s share price hit $700 a share in after-hours trading.

Apple’s stock had closed at $699.78 at the end of trading yesterday, just a few cents short of the $700 mark, but it gained in extended trading yesterday evening. The $700 mark took Apple’s Market Cap to over $656bn.

Apple is one of a handful of companies, including Google, who have hit $700 a share. Google (currently trading at $709.98) passed that watershed mark earlier in September, notes Seeking Alpha.

Google might have beat Apple to the $700 mark, but while Apple’s stock has gained 78% over the past 12 months, Google has gained only 30%, notes Forbes. The Nasdaq100 has seen a 23% increase in the same time, HP has seen a 22% decline.

Apple is an attractive stock because it is trading at a P/E ratio of 16 (price to earnings ratio is calculated by dividing a stock's current share price by its earnings per share for a twelve-month period – you pay $16 and get $1 back – generally a lower ratio is better). Apple’s average P/E was 22 over the past five years, notes The Motley Fool.

This means that, despite its high price, Apple’s stock is still inexpensive because of the returns it delivers.

Of course the thing leading the massive growth at Apple is the iPhone: iPhone sales count for the biggest chunk in the company’s profit, and hence news of the new iPhone 5 is bound to have a significant effect on the stock. 

Other stocks could do well thanks to the iPhone 5, notes The Motely Fool, which makes some recommendations of other stocks to buy if you want to cash in on Apple’s success.

  • Qualcomm - provides chips and technologies used in the iPhone 5, (P/E of 19).
  • Cirrus Logic - provides audio chips for Apple products, (P/E ratio near 35)
  • Broadcom - Apple is a main customer, (P/E ratio of 26)
  • China Mobile - largest cellular carrier in the world, expected to carry the iPhone 5, (P/E of 11)

Will Apple continue its assent? Various analysts have forecast that Apple will reach $800, $900, and even $1,000.

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