It's remarkable I'm even discussing a company reaching a market capitalization of $3 trillion. After all, it wasn't too long ago when the investing world was fawning over Apple (AAPL 0.83%) becoming the first to reach a $1 trillion market cap.
Nevertheless, Apple's stock has been on fire, rising 326% in the previous three years alone. Let's break down Apple's business and try to determine the likelihood of it reaching a $3 trillion market cap in 2022.

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Revenue and earnings fueling stock-price growth
To calculate a company's market cap, take its stock price and multiply it by the number of its shares outstanding. A company's stock price typically rises and falls based on its fundamental business prospects and essential metrics, such as revenue and earnings growth.
In those departments, Apple is performing excellently. From 2017 to 2021, Apple's revenue grew from $229 billion to $366 billion. That's over $125 billion in revenue growth in just four years. Looking back longer-term, Apple has grown revenue at a compounded annual rate of 12.9%. That's without doubt an impressive feat.
Fueling this rapid expansion is a suite of electronic devices that consumers seemingly always want. These include the iconic iPhone, iPad, Mac computers, Apple Watch, AirPods, and more. Apple's consumer brand loyalty allows it to sell these products at healthy profit margins -- 34.3% in its most recent quarter ended Sept. 25.
In addition to products, Apple sells a host of services, including Apple Music and Apple TV+, which are also immensely popular among consumers. Indeed, Apple reported having 745 million paying subscribers at the end of Q4, 160 million more than the same time last year. To put that figure into context, Netflix is the most popular streaming service worldwide and only has 214 million subscribers. And growth in subscribers is driving growth in services revenue at Apple. In Q4, services revenue increased to $18.3 billion, from $14.5 billion in the same quarter last year.
Services are vital to Apple's business because they generate higher gross profit margins than its products segment at 70.5%, versus 34.3%. Each dollar of revenue through services generates more than twice the gross profit.
The combination of products and services have worked together to increase Apple's earnings per share at a compounded annual rate of 19% in the previous 10 years. With that level of revenue and profit growth, it's no surprise that Apple's market cap is approaching $3 trillion.
Apple to $3 trillion in 2022?
Looking ahead to 2022, Apple's iPhone will likely be the essential product to propel it forward. The company released a 5G model late last year, and the major technological upgrade is fueling sales of the legendary product. Note, the iPhone is the primary device that brings consumers into the Apple ecosystem. Once a customer has an iPhone, they are more likely to subscribe to services like Apple Arcade, or Apple Music, which, as mentioned earlier bring higher profit margins for the company.
In the company's fiscal year ended Sept. 25, iPhone sales increased from $138 billion in 2020 to $192 billion this year. Demand for the product remained high, but Apple had difficulty fulfilling the demand due to supply chain disruptions worldwide caused by the coronavirus pandemic. Apple management estimated that supply chain disruptions cost the company $6 billion in sales in Q4, and management is estimating it will cost even more in the current quarter.
Customers who would have likely purchased the iPhone in 2021 perhaps delayed buying because their local store didn't have the desired configuration on hand. Regardless of the potential supply chain effects, the company will likely still pass the milestone since it won't take much to get Apple to a $3 trillion market cap in 2022. As of this writing, the company's market cap was $2.94 trillion.