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Bullish Analyst Says Apple Has Potential to Become Trillion Dollar Company Within 18 Months
Apple has the potential to become a trillion dollar company by 2019, according to RBC Capital Markets analyst Amit Daryanani.
In a research note on Monday, Daryanani said Apple could reach or exceed a trillion dollar market cap within the next 12 to 18 months.
An excerpt from Daryanani's research note, edited slightly for clarity:
In aggregate, we see a scenario where in the 2019 fiscal year, Apple sustains $12+ earnings per share and, assuming the valuation frameworks remains stable/improves, it should get AAPL stock toward $192–$195, which would equate to a market cap above $1 trillion.Daryanani believes the so-called "iPhone 8" and the upgrade supercycle it's expected to drive will be a major catalyst towards Apple's path to a trillion dollar valuation. Looking further ahead, he thinks there is potential for Apple to continue growing its Services category revenue by double digits year over year.
Longer-term, we think there is potential for Apple to continue growing Services revenue by double digit year-over-year given the company's expanding installed base [of devices], increasing App Store sales within the current installed base, demand for cloud storage/compute services, and further adoption of Apple Pay.Apple's Services category brought in $7.17 billion last quarter, from $6 billion in the year-ago quarter, representing 18 percent year-over-year growth. Apple CEO Tim Cook said the Services category is already the size of a Fortune 100 company, with hopes to double the category's revenue by 2020.
Earlier this month, Apple's market cap surpassed the $800 billion mark for the first time ever as the company's shares traded above $153. RBC has raised its Apple stock price target to $168, up from $157, given the upside it anticipates from the iPhone 8 and increasing services-related revenue.
Wall Street analyst Brian White also raised his 12-month price target for Apple's stock to $202, up from $185, earlier this month. White believes Apple "remains among the most underappreciated stocks in the world," and his bullish price target suggests the company could be valued at a trillion dollars within the next year.
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28 months ago
Apple CEO Tim Cook said the Services category is already thesize of a Fortune 100 company, with hopes to double the category's "revenue" by 2020. :- Macrumors quote
Remember Once Former CEO of Apple Said :-
"I was worth about over a million dollars when I was 23 and over ten million dollars when I was 24, and over a hundred million dollars when I was 25 and... it wasn't that important — because I never did it for the money."
"Apple's goal isn't to make money. Our goal is to design and develop and bring to market good products.... We trust as a consequence of that, people will like them, and as another consequence, we'll make some money. But we're really clear about what our goals are."
Times have changed,seems like now it's more for the money,Well done Tim Cook
Remember Once Former CEO of Apple Said :-
"I was worth about over a million dollars when I was 23 and over ten million dollars when I was 24, and over a hundred million dollars when I was 25 and... it wasn't that important — because I never did it for the money."
"Apple's goal isn't to make money. Our goal is to design and develop and bring to market good products.... We trust as a consequence of that, people will like them, and as another consequence, we'll make some money. But we're really clear about what our goals are."
Times have changed,seems like now it's more for the money,Well done Tim Cook
28 months ago
Apple will have to release more than just watch bands to make that happen.
Dude, honestly the watch band comments are getting really old and it doesn't sound as witty as you think it does. Apple has a lot of R&D going on right now in autonomous vehicles and health functions for the Apple Watch. I'm part of a research study right now on my Watch, they're collecting my heart rate data from the Cardiogram app in an effort to make the watch detect heart beat abnormalities, heart disease and cardiac arrest. And yeah, they release bands in pretty colors too. Your point?Do some research and have some faith. Buy some stock and you may very well make a tidy profit from it. Or just miss out on it, up to you.
28 months ago
Apple CEO Tim Cook said the Services category is already thesize of a Fortune 100 company, with hopes to double thecategory's revenue by 2020. :- Macrumors quote
Times have changed,seems like now it's only for the money,Well done Tim Cook
Yeah, hiring 200 biomed PhD's and spending billions in research on a glucose-metering device surely corroborates your point. Only for the money.
28 months ago
Dude, honestly the watch band comments are getting really old and it doesn't sound as witty as you think it does. Apple has a lot of R&D going on right now in autonomous vehicles and health functions for the Apple Watch. I'm part of a research study right now on my Watch, they're collecting my heart rate data from the Cardiogram app in an effort to make the watch detect heart beat abnormalities, heart disease and cardiac arrest. And yeah, they release bands in pretty colors too. Your point?
Do some research and have some faith. Buy some stock and you may very well make a tidy profit from it. Or just miss out on it, up to you.
It has forced them into a defensive/incumbent position and stalled ambition to make new, revolutionary products. Thus alienated them from their original mission, which is exactly what SJ warned about.
Look at the latest iPad, a 4/5 years old design that denies every form of inspiration/innovation.
Disruptive innovation (launching new products, initially cannibalizing existing products)
has become the opposite of what they want: to keep marketshare, to remain leader, to not disturb current business. Move up the premium laddder, rebranding existing stuff as Pro (adding some gimmicks to justify price increases)
So superfluous budgets, massive R&D, but hardly any incentive to use them. Thousands of patents, but mostly defensive, keeping them unused to prevent the competion to innovate.
Leading to very few new products and designs.
What essentially drives Apple now is greed on a massive scale, requiring TC to save the humble image ("caring" for the impaired, pleading "accessibility", to distract public attention from inaccessibility due to increased prices)
Health: lots of incentives in the approach to conquer new markets. But difficult or impossible to get accreditation in medical world, which they grossly underestimated.
Same for autonomous vehicles: failed partnerships, difficult to innovate, absolutely no position to make an inroad in entirely new market. Huge investments to be written off already. Facial loss will prevent them from getting out. Lack of position/momentum will force them to buy themselves in somewhere. Only then, if any, the race begins.
iPhone will remain strong (it is and remains the cash cow) but it will take them utmost energy to stay current. And with all the attention going into paraphernalia activities, that will go at cost of the mid-segment (Mac, iPad, IT)
Innovation level remains incredibly low: companies of this mammoth size should bring 10/20 new products a year (compare with the car industry to realize what true competition would do)
The secret pact with Samsung (going to its limits supplying key technology on a mass scale, despite being "sued") impairs every form of an open smartphone marketplace currently.
28 months ago
I kinda hate that they are seeing this much love and bullish predictions in the marketplace. I'm sure they look at this as an indicator that they are making the right decisions, but based on my (albeit anecdotal) experiences and conversations, people are seriously concerned about the Mac line and that may have a bigger impact on phone purchases than Apple realizes.
What happens when the "Sheeple" that raved about Apple's superior products start jumping ship and singing a different tune?
I think the dedicated minority has a bigger influence on the quiet majority than Apple is comfortable admitting.
What happens when the "Sheeple" that raved about Apple's superior products start jumping ship and singing a different tune?
I think the dedicated minority has a bigger influence on the quiet majority than Apple is comfortable admitting.
28 months ago
Analysts predict the future earnings and stock prices every day of the week. The only difference at the moment is an otherwise meaningless "goal" - $1 trillion in market capitalization; a less than 25% increase in current share price.
Market capitalization is a very simple and simplistic number - the number of shares in investor hands, multiplied by the price of those shares.
The prediction boils down to three questions:
1. Will share price increase by 25%?
2. How long will it take for share price to rise 25%?
3. Will Apple's stock buybacks reduce the number of shares outstanding, therefore requiring a greater than 25% rise in share price to reach $1 trillion?
Yawn!
This is little different than looking forward to your next birthday. When "the big day" finally arrives, you're just one day older. It doesn't begin to take on meaning until you compare your life today with what it was 10, 20, 30 years ago.
Yeah, I own Apple shares, it'd be cool if the predictions turn out to be true. But that's (pardon the expression) trumped by a much greater truth: The future is unpredictable.
So let's compare Apple to where it was 10, 20, 30 years ago. One billion Apple computing devices in use today (iPhone, iPad, Watch, Apple TV, and Mac combined). 30 years ago? Apple sold about 4 million Macs annually. The only other computing device sold was Newton, which barely made a blip. They now sell about that many Macs quarterly. If we assume an average useful life of 5 years for a PC, then there were around 20 million Apple computers in use. 30 years later, there are 50 times as many.
As to the inevitable chorus of Mac-focused complaints/demands, it's besides the point. Conventional PCs are becoming less important with every passing year. There will never be a time when every worker and every member of a household will have a PC, and it never came close to happening. It's a totally unreasonable to expect that every person on earth (over the age of 5 or 10) would carry a laptop wherever they go. However, a remarkably huge number already do carry a computer in their pockets, a computer that is far more non-tech-user-friendly than any PC..
Apple changed its fortunes by following a dream that goes back to the foundations of the company - putting the power of computers into everybody's hands. The conventional PC form factor and design philosophy could only take that dream so far. Anyone who believes Apple needs to stick to its roots... that's exactly what they are doing. It's only a matter of how you define "roots."
Market capitalization is a very simple and simplistic number - the number of shares in investor hands, multiplied by the price of those shares.
The prediction boils down to three questions:
1. Will share price increase by 25%?
2. How long will it take for share price to rise 25%?
3. Will Apple's stock buybacks reduce the number of shares outstanding, therefore requiring a greater than 25% rise in share price to reach $1 trillion?
Yawn!
This is little different than looking forward to your next birthday. When "the big day" finally arrives, you're just one day older. It doesn't begin to take on meaning until you compare your life today with what it was 10, 20, 30 years ago.
Yeah, I own Apple shares, it'd be cool if the predictions turn out to be true. But that's (pardon the expression) trumped by a much greater truth: The future is unpredictable.
So let's compare Apple to where it was 10, 20, 30 years ago. One billion Apple computing devices in use today (iPhone, iPad, Watch, Apple TV, and Mac combined). 30 years ago? Apple sold about 4 million Macs annually. The only other computing device sold was Newton, which barely made a blip. They now sell about that many Macs quarterly. If we assume an average useful life of 5 years for a PC, then there were around 20 million Apple computers in use. 30 years later, there are 50 times as many.
As to the inevitable chorus of Mac-focused complaints/demands, it's besides the point. Conventional PCs are becoming less important with every passing year. There will never be a time when every worker and every member of a household will have a PC, and it never came close to happening. It's a totally unreasonable to expect that every person on earth (over the age of 5 or 10) would carry a laptop wherever they go. However, a remarkably huge number already do carry a computer in their pockets, a computer that is far more non-tech-user-friendly than any PC..
Apple changed its fortunes by following a dream that goes back to the foundations of the company - putting the power of computers into everybody's hands. The conventional PC form factor and design philosophy could only take that dream so far. Anyone who believes Apple needs to stick to its roots... that's exactly what they are doing. It's only a matter of how you define "roots."
28 months ago
Times have changed,seems like now it's only for the money,
It is? Since you decided to quote Steve Jobs, I suggest you reread your quote again. Because Apple is still company that makes exceptional products and the consumer chooses to support Apple's products line and services, which results in Apple making money. It's an exchange for services and there a successful company because of it. They're making money because they make a product that lasts and they stand behind that.
28 months ago
I hope everything goes well this fall, otherwise trillion dollar market cap won't happen.
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