Apple could hit $3T market cap by 2022, says analyst
Continuing iPhone 12 demand is exceeding Wedbush's most bullish expectations, with the firm predicting that a $3 trillion Apple market capitalization can be hit by mid-2022.
Credit: Andrew O'Hara, AppleInsider
In a note to investors seen by AppleInsider, lead analyst Daniel Ives writes that recent supply chain checks in Asia continue to be "incrementally bullish" around iPhone 12 and iPhone 12 Pro demand. The current trajectory is higher than Ives' previous bull case scenario for the December quarter.
Based on those checks, Ives believes the supply chain saw iPhone unit builds in the low to mid 90 million range. In December, Ives forecast a number around 80 million with a possibility of builds in the mid-80 million range.
The current iPhone unit build data represents a 35% increase over Wedbush's and Wall Street's initial forecasts, Ives added.
In the March quarter, Ives predicts total iPhones shipped ticked up 5% over the past few weeks and are now in the 60 million to 70 million range. For the June quarter, initial builds are in the low 40 million range with a potential upward bias.
"We have not seen a launch trajectory uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis," Ives wrote.
The analyst believes that Apple has the potential to ship upward of 240 million units in 2021, with the possibility that it could hit an "eye popping" 250 million units. That's well above Wall Street's current forecast of 218 million units.
Wedbush continues to model that 350 million out of 950 million iPhone units globally are in the upgrade window.
Ives adds that China is still a centerpiece of the ongoing "5G supercycle" with 20% of upgrades expected to come from the region. The analyst says he is seeing positive trends from China heading into 2021.
"In a nutshell, while services growth remains the key to the Apple re-rating story over the past six months, the hearts and lungs of the Apple growth story are built around iPhone installed base upgrades," Ives writes.
The analyst is maintaining his 12-month price target of $160, based on a sum-of-the-parts valuation on Wedbush's 2022 AAPL fiscal year estimate. That breaks down to a 15x multiple on Services at $1.1 trillion and a 6.5x multiple on the rest of Apple's hardware business at $1.7 trillion.
The analyst has also bumped his bull case to $200, which results from raising those 2022 estimates to $1.3 trillion for Services and $2.2 trillion for Apple's hardware business. The bull case, Ives notes, would result in a $3 trillion market valuation in the next 12 to 18 months.
Shares of AAPL are currently trading at $130.76 on Wednesday morning, up 1.54% in intraday trading.
Credit: Andrew O'Hara, AppleInsider
In a note to investors seen by AppleInsider, lead analyst Daniel Ives writes that recent supply chain checks in Asia continue to be "incrementally bullish" around iPhone 12 and iPhone 12 Pro demand. The current trajectory is higher than Ives' previous bull case scenario for the December quarter.
Based on those checks, Ives believes the supply chain saw iPhone unit builds in the low to mid 90 million range. In December, Ives forecast a number around 80 million with a possibility of builds in the mid-80 million range.
The current iPhone unit build data represents a 35% increase over Wedbush's and Wall Street's initial forecasts, Ives added.
In the March quarter, Ives predicts total iPhones shipped ticked up 5% over the past few weeks and are now in the 60 million to 70 million range. For the June quarter, initial builds are in the low 40 million range with a potential upward bias.
"We have not seen a launch trajectory uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis," Ives wrote.
The analyst believes that Apple has the potential to ship upward of 240 million units in 2021, with the possibility that it could hit an "eye popping" 250 million units. That's well above Wall Street's current forecast of 218 million units.
Wedbush continues to model that 350 million out of 950 million iPhone units globally are in the upgrade window.
Ives adds that China is still a centerpiece of the ongoing "5G supercycle" with 20% of upgrades expected to come from the region. The analyst says he is seeing positive trends from China heading into 2021.
"In a nutshell, while services growth remains the key to the Apple re-rating story over the past six months, the hearts and lungs of the Apple growth story are built around iPhone installed base upgrades," Ives writes.
The analyst is maintaining his 12-month price target of $160, based on a sum-of-the-parts valuation on Wedbush's 2022 AAPL fiscal year estimate. That breaks down to a 15x multiple on Services at $1.1 trillion and a 6.5x multiple on the rest of Apple's hardware business at $1.7 trillion.
The analyst has also bumped his bull case to $200, which results from raising those 2022 estimates to $1.3 trillion for Services and $2.2 trillion for Apple's hardware business. The bull case, Ives notes, would result in a $3 trillion market valuation in the next 12 to 18 months.
Shares of AAPL are currently trading at $130.76 on Wednesday morning, up 1.54% in intraday trading.
Comments
http://www.asymco.com/2021/01/13/the-entrants-guide-to-automotive-industry-updated/
"That means that either there will be twice as many cars as we have now or they will be twice as expensive or they will be twice as profitable. And all that will happen really soon. We can’t have twice the cars since there will be nowhere to park them. We can’t double the price unless we double our wealth. We can’t make them twice as profitable unless we disable competitive forces and change the production system.
Or, it could be that half the assets (all the other automakers) are worthless."
Bubble. Burst. Soon.
https://seekingalpha.com/article/4395444-tesla-please-stop-madness-shares-are-tremendously-overvalued
Tesla stock price bubble is at tulip level. It's insane. For any Tesla stock owners out there, this will burst at some point. I give them 4 years after Apple/Huyndai enters this market before Telsa is near or out of business, at worst, or their stock price plummets, at best.
He’ll discuss the most mundane engineering details at any of his companies to the nth degree. What he’s done with Tesla and the EV industry alone is nothing short of astounding, the next Henry Ford. Couple that with his audacity and engineering vision to start a rocket company from scratch, that lands the rockets, no less. Yeah, he’s not an engineer. Nor were Galileo and da Vinci and Tesla and Edison by your logic.
It’s an engineers’ world, you just live in it.
He is a brilliant self promoter, I'll give him that.
I mock Elon for that fact that Tesla only generates a small profit, and only in the last couple of years, and that from selling carbon credits to other Auto manufacturers, now ending. Tesla's operation, to date required government tax credits, same as his BEV competitors. The difference is that his competitors are better manufacturers, at higher volumes, and certainly, are better at customer service. This is being borne out by Volkswagens entry into the market.
What I should really mock Elon for is his "vision" and "promises" that pump his stock, but have little effect on his manufacturing. The Model Y design is a joke, has seen poor uptake, and Elon has been talking of a "redesign" for the unfinished plant in Germany. The market for the Model's S, X, and 3 are saturated, with much price cutting, and the Cybertruck won't likely get close to the volumes of trucks that GM, RAM, and Ford sell, and these companies have announced EV versions for the market, unlike the vague Cybertruck design.
But by all means, invest in Tesla, at least until it deflates, which it will, sooner than later. Certainly, better educate yourself about the competition, especially in Asia, and Europe, but also North America.
Oh, and those reusable rockets that land on their tails? The McDonnell Douglas DCX was doing that some 25 years ago, do hardly starting "from scratch", but credit for SpaceX building on what went before them.
The real test of these companies, is if there valuation is tied to anything but Elon, and Elon has been showing a very disturbing side of himself in the media lately, losing supporters.
In truth, why should I care what happens to Tesla investors.
So what's SpaceX innovation here, right?
My first sentence;
Which brings to the forefront; why do Elon fans have such tunnel vision wrt Tesla?
I came expecting conversation about Apple’s possible 3 trillion dollar valuation! Didn’t find anything remotely related to it! What the heck’s going on here?” You people need to go find a Tesla FORUM!”