Apple Is Now Worth A Staggering $500 Billion — Can It Hit $1 Trillion?

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Apple (AAPL) crossed an amazing milestone in after-market trading yesterday, when its market capitalization exceeded $500 billion for the first time. To put this in perspective, the tech juggernaut is now more valuable than the gross domestic product of Poland, Belgium, Sweden and even Saudi Arabia.

Apple is one of the only one of four companies in history to break this mark, and unlike others that have briefly traded in this neighborhood--Microsoft (MSFT) and Cisco (CSCO) --Apple has the potential to not only sustain this value but blow past it.

Why?

First because Apple's stock still is not expensive on traditional valuation measures.

The stock trades at a 15X trailing price-earnings ratio, which is about the average PE ratio for the market as a whole for the past century. Needless to say, Apple is growing its earnings vastly faster than the market as a whole.

Second, Apple's penetration of its key product categories is still relatively low. Macs, for example, still make up only about 10% of PC sales worldwide. iPhones, meanwhile, are only about 20% of the exploding global smartphone market, which itself is growing extremely rapidly. And Apple dominates the tablet market, which is still in its infancy.

Thus, all three of Apple's core businesses appear to have plenty of room to grow. And the company is widely expected to launch a major new business later this year, TVs, which could open up another huge growth opportunity.

Lastly, for those focused on near-term catalysts, Apple should have plenty of good news to announce over the next six months. The iPad 3 is expected next week (click here for all the expected features), the iPhone 5 should appear this summer, and Apple's TV is expected in the fall.

Obviously, as with any fast-growing technology company, there is plenty of downside risk for Apple, especially given the loss of Steve Jobs. All the products Apple will release this year were likely incubated under Jobs, and it won't be until next year and the following year that we'll know how well Apple can innovate under its new CEO, Tim Cook.

But Cook is off to a great start so far. And Apple's three businesses are humming, with another potentially big one thought to be on the way. And Apple's stock just isn't expensive relative to historical earnings, let alone expected future earnings.

So it is not, actually, far-fetched to think that Apple's value could eventually hit $1 trillion or more.

SEE ALSO: YOU HEARD IT HERE FIRST: Apple's Going To $1,000 A Share!