Top hedge funds predict Apple could achieve trillion-dollar market cap
As shares of Apple repeatedly reach new all-time highs, major investors believe the trend could continue, propelling the iPhone maker to a massive market capitalization level of $1 trillion as soon as next year.
Apple "without a doubt" has a chance of reaching a $1 trillion market cap next year, Alexander Alternative Capital's Michael Corcelli said in an interview with Reuters. He expects Apple's march to $1 trillion will continue this holiday season, with record sales of the iPhone, iPad and other products.
Joining him was Steve Einhorn of Omega Advisors Inc., a $10 billion hedge fund. With shares currently trading around $114, Einhorn said AAPL is "attractively priced," and he sees the company reaching a trillion-dollar market cap "eventually."
As of Tuesday morning trading, Apple's market cap has been hovering around $670 billion. Up until last week, its previous record high was $658 billion, reached in September of 2012.
To put the market's value on Apple in perspective, Google currently has a market cap of around $366 billion, Microsoft is valued at $405 billion, Amazon at $151 billion, and Netflix is $23 billion.
Shares of Apple fluctuated around the $100 mark until mid-October when they began to rise after the company reported a record September quarter, earning $8.5 billion in profit on sales of 39 million iPhones and 5.5 million Macs. Investors are bullish on demand for the iPhone 6 and iPhone 6 Plus, and also have high hopes for the debut of the new Apple Watch in early 2015.
As Apple's share price has grown, analysts on Wall Street have been compelled to increase their own price targets. Just this month, RBC Capital Markets raised its target to $120 per share, while UBS set a new forecast of $125.
Apple "without a doubt" has a chance of reaching a $1 trillion market cap next year, Alexander Alternative Capital's Michael Corcelli said in an interview with Reuters. He expects Apple's march to $1 trillion will continue this holiday season, with record sales of the iPhone, iPad and other products.
Joining him was Steve Einhorn of Omega Advisors Inc., a $10 billion hedge fund. With shares currently trading around $114, Einhorn said AAPL is "attractively priced," and he sees the company reaching a trillion-dollar market cap "eventually."
As of Tuesday morning trading, Apple's market cap has been hovering around $670 billion. Up until last week, its previous record high was $658 billion, reached in September of 2012.
To put the market's value on Apple in perspective, Google currently has a market cap of around $366 billion, Microsoft is valued at $405 billion, Amazon at $151 billion, and Netflix is $23 billion.
Shares of Apple fluctuated around the $100 mark until mid-October when they began to rise after the company reported a record September quarter, earning $8.5 billion in profit on sales of 39 million iPhones and 5.5 million Macs. Investors are bullish on demand for the iPhone 6 and iPhone 6 Plus, and also have high hopes for the debut of the new Apple Watch in early 2015.
As Apple's share price has grown, analysts on Wall Street have been compelled to increase their own price targets. Just this month, RBC Capital Markets raised its target to $120 per share, while UBS set a new forecast of $125.
Comments
Apple innovates new kind of DOOM!!!
Okay... now the pump and dump has officially begun...
no it hasn't
billion dollar cap is reasonable if Apple continues to grow earnings 15-20% YoY
i think you are sour grapes since you hold no shares
I always love it when people put an "if" in a statement that is supposed to be absolute.
$1T eventually, sure. But "next year"? You have to be outrageously bullish on AAPL to expect it to increase nearly 50% over the next 13.5 months. (Not that I'd complain.)
I'm not sure about that. It's almost 700 billion now (.672 trillion).
If Watch gets out the door and starts moving, I think you'd see $200 a share easy.
The only thing more obnoxious than triumphalism is anticipatory triumphalism.
It's all about iPhone. Apple has one bad quarter where iPhone sales aren't great or margins have declined and Wall Street will dump the stock in a hurry. There's nothing fundamentally different about Apple now as there was in the fall of 2012 when the stock started taking a nose dive. The stock market has never been rational when it comes to Apple.
This is the stupidest kind of hyperventilation over a meaningless "milestone" number. We should resist this kind of talk like we resist the rabid hooting of a group of juvenile beta-male chimps.
The only thing more obnoxious than triumphalism is anticipatory triumphalism.
Look, it will make Carl happy. If Carl's happy, we're all happy.
Besides, the thought of Apple being worth nearly three times what little Google is...well, when I punch those numbers into my calculator it makes a happy face.
Apple has risen about 41% so far this year. It's risen almost 70% before it took the plunge. I checked my realtime account, and it's about $114.62 right now. The market capitalization is just under $670 billion. Next year? Sure, I suppose it can, as long as sales remain strong, we don't see a major problem with iPad sales, and the watch does well enough.
As long as Apple doesn't buy too many shares back, that is. That makes it more difficult.
I'm not sure about that. It's almost 700 billion now (.672 trillion).
If Watch gets out the door and starts moving, I think you'd see $200 a share easy.
Sure, but not in the next 13-and-a-half months. That's just crazy talk.
Sure, but not in the next 13-and-a-half months. That's just crazy talk.
When has Wall Street ever been rational?
Until Apple has one quarter where iPhone sales aren't quite what Wall Street was expecting and then they dump the stock.
... or... if the Apple Watch doesn't zoom to record sales in the first quarter.
... or... if the iPad has a 9 million unit sales quarter.
... or.... all three together.
I find it funny that some people condemn Wall Street when AAPL is used as a pissing post but the minute that Wall Street starts touting AAPL as the next big thing and will exceed expectations... well, then Wall Street is everybody's momma.
“Remember, thou art mortal, and all glory is fleeting.”
Whispered into the ear of Roman generals as they rode into Rome on a chariot with a slave holding a laurel wreath above their head.
I am absolutely convinced that Tim Cook has his head screwed on tight, has Apple’s future well planned ahead, and will guide the company with a firm hand. I think we can finally let Steve Jobs rest in peace. He picked the right guy to succeed him. You did good, Steve. Thanks!
Yeah yeah, the last time someone bang up the drums for 1 trillion dollar market cap, Apple dived from $700 to $385 a share. It was right after the release of the iPhone 5, which was a "large screen iPhone" at the time. Back then the media sounded like Apple was dying because of Samsung.
Now that the stock has split and we are at $114 and odd ($800 pre-split), the trillion dollar drum sounds again. Financial analysts were nothing but a bunch of jerks, simply following the herd. Did any of these recommend buying Apple way back at $400?
Where as I do and have done well by my investment and I too see this as pump and dump.
“Remember, thou art mortal, and all glory is fleeting.”
Whispered into the ear of Roman generals as they rode into Rome on a chariot with a slave holding a laurel wreath above their head.
I am absolutely convinced that Tim Cook has his head screwed on tight, has Apple’s future well planned ahead, and will guide the company with a firm hand. I think we can finally let Steve Jobs rest in peace. He picked the right guy to succeed him. You did good, Steve. Thanks!
Memento mori...
I'm not sure if anyone else is capable of managing Apple the way Tim is. I think you'd need a team to replace him if he got the boot. It helps that he's had Apple's operations division under his fist for a long time, he knows it well. Just need to make sure the product visionaries can guide the company forward, because that's Tim's weakness, at least according to Steve.
Apple has risen about 41% so far this year. It's risen almost 70% before it took the plunge. I checked my realtime account, and it's about $114.62 right now. The market capitalization is just under $670 billion. Next year? Sure, I suppose it can, as long as sales remain strong, we don't see a major problem with iPad sales, and the watch does well enough.
As long as Apple doesn't buy too many shares back, that is. That makes it more difficult.
Reaching $100 in 2012 was an anomaly... a real pump and dump. AAPL should have hit no higher than about $81.
That's what I see happening this time as well... one real blow out 1st quarter... drive the stock up to a $trillion, then slowly drive it down and then pull the plug at the first sign of any sort of decline in sales.
When has Wall Street ever been rational?
Right. AAPL could literally be anywhere from $60 to $180 this time next year. Look at the 10-year trends before assuming that its price is going to keep rising at its current rate. A massive "correction" is a real possibility, triggered by almost any bad news. If nothing else, people will want to lock in their gains.
It's not meaningless. It's no different than saying that the stock could hit, say, 170. As an investor, I'm interested in knowing what they are thinking. There are a lot of possible investments to make, and there is no direct way to know which are really better than other good ones. I've stuck with Apple, but there are many people who compare Apple, Alibaba, etc. how to know which to put more money into is a difficult decision.
Going by the technicals doesn't always yield a useful answer. Right now, hedge funds are loading on Alibaba, and backing off somewhat on Apple. Their thinking is very important. So if some of them are thinking that Apple could hit $1 trillion in a year or two, that's good to know.
There's a big difference in talking about what happening in a post if you don't invest, because then you don't need to make difficult decisions, and you don't care what's said. But if you do invest, and it's a decent sum, then you need all the information you can get. Don't forget that for a long time, Apple had been undervalued when compared to other companies in their industry segment. Now, they're moving to that average, but still have a bit to go. They will hit the current average (measured by P/E) when they're worth about $700 billion. That's an interesting fact. Are they worth more than the average, and, if so, by how much?
But, hopefully, their sales and net will continue to increase. Whenever that does, from quarter to quarter, their P/E drops, if the stock doesn't continue to rise. So if we see a lockstep, the the valuation will move up. If investors believe that Apple will continue to do well, then the P/E will rise.
So yes, these numbers are important, as investing is as much psychological as much as technical. Otherwise, why would Amazon be over $300, when they continue losses, and a pretty big one last quarter?