After a poor first half of the year, Apple's stock price began to recover in the second half of the year, and today's US stocks rose 1.37% to $182 before market hours, and if Apple rose to $182.86, it would become the world's first company with a market capitalization of $3 trillion.
With bulls pouring in and analysts singing, Apple is likely to complete this milestone this week, even today.
Wedbush: Apple's Golden Age
Cupertino is one of the core cities of Silicon Valley, and Apple's headquarters are also located here. Daniel Ives, a prominent Apple bulls analyst at Wedbush, said on Sunday that Cupertino was gradually approaching a milestone.
He said that as investors begin to better understand the company's strong fundamentals in 2022, Apple is on track to become the first company to reach a market capitalization of $3 trillion this week.
The analyst said in the report: "Reaching $3 trillion is another watershed for Apple, as Apple will continue to prove investors wrong about Cupertino's growth." ”
The analyst said the "key" to Apple's revaluation is the company's services business, whose flagship hardware ecosystem is in the midst of its strongest product cycle in more than a decade. Wall Street's service business is valued at about $1.5 trillion and is expected to reach about $80 billion in annual revenue.
Ives noted that despite supply chain issues, the iPhone's growth story will continue into 2022. Analysts are also looking forward to the launch of new products, such as the highly anticipated AR headset Apple Glasses, which could debut in the second half of 2022. That could increase Apple's earnings per share by about $20, which isn't counted in the stock.
He said Apple's market capitalization will reach $3.5 trillion next year. Wall Street underestimated the growth of the iPhone 13, which is about 15 percent more in demand than supply.
No! Its best days haven't come yet!
According to Loup Ventures analyst Gene Munster, the best days are yet to come.
The analyst said in a note On Sunday that his previously set target of $200 was "too conservative." Munster said apple will earn $7 per share in fiscal 2023, which at current valuations means a $250 stock price — 38 percent above current levels.
Munster's optimism relies on two new product categories — metaversity and autonomous driving.
"AR or MR glasses are Apple's logical contribution to the metaverse, where we will play and work in a more immersive digital world," Munster writes. ”
When it comes to autonomous driving, Munster's tone is more cautious, saying the car could take more than five years to come out. Still, he didn't shy away from articulating the value that new opportunities could bring.
"If you assume that Apple can capture 10 percent of the automotive market, they currently have less than 20 percent of the mobile phone market, at $60,000 per vehicle, which equates to $540 billion in annual revenue."
The analyst said he used the same logic as when Apple's valuations broke through $1 trillion and $2 trillion.
"I believe that based on Apple's current business and the business it may add in the future, Apple's best days have not yet arrived."
"Given the size of Apple's new business in the future, I think it makes sense to raise the price-to-earnings ratio to 35x," the analyst wrote.
Munster noted that Apple's valuation is 26 times its 2023 earnings. By comparison, Munster highlighted that Facebook has a 19x long-term PE, 23x for Google, and 57x valuation for Amazon.
Xiao Mo: Raise apples to $210
JPMorgan Chase & Co. released a research report saying that it reiterated Apple's overweight rating and raised its price target from $180 to $210.
Samik Chatterjee, an analyst at Xiaomo, believes that Apple stocks have successfully reversed the underperformance of the first half of 2021 in recent weeks as expectations around the iPhone 13 demand cycle improve from "low investor expectations earlier this year."
However, the analyst believes that most of the revenue and earnings growth associated with the iPhone 13 cycle "will continue."
The analyst said this would prompt investors to be willing to again determine a peak multiple based on general earnings expectations, similar to entering the iPhone 12 cycle. Chatterjee reiterated that Apple will be his investment choice for 2022.