“The first $1 trillion is always the hardest,” Dan Gallagher writes for The Wall Street Journal. “Apple Inc. has spent the year racing toward that milestone, in terms of total market value. With two days remaining in the year, Apple’s share price has already surged 47% — its best annual performance since 2010, when the company was worth about one-third its current value. This year’s run has been driven largely by the anticipation of a new crop of iPhones expected by Wall Street to unleash a ‘supercycle’ of sales growth.”
“Whether or not that supercycle actually plays out as hoped, Apple’s stock price is highly unlikely to repeat its recent performance next year,” Gallagher writes. “The stock has historically turned down following a big iPhone launch — particularly when it is trading around 15 times forward earnings, like it is now. That’s because strong iPhone cycles now have a tendency to lead to weaker ones, especially since the growing price tag of Apple’s phones drives customers to hold on to their devices for longer periods.”
“Apple, like other big tech giants, will benefit from the recent tax reform package that removes the incentive to stockpile billions of profits overseas. But the $252 billion that Apple has stashed offshore will most likely go toward paying down its growing debt pile and boosting cash return—neither of which are likely to re-rate the stock.”
Read more in the full article here.
MacDailyNews Take: Barring unforeseen catastrophe, Apple Inc. will see a trillion dollar market value.
The iPhone X Plus will get them there when it takes the world by storm next holiday season.
With it’s revolutionary “Double Notch” design!
Apple-“Best when used fresh! ™”
oh be quiet, many understand and even prefer the derogatorily called notch
What?! I called it revolutionary, didn’t I?
I see, you guys don’t believe your own BS! 😉
Peace man!
$191.80 is the share price for AAPL to reach $1 trillion market cap, based on 5,213,840,000 shares outstanding, as of June 2017.
I think this WSJ article is intended to suppress Apple stock! Apple has now a growing service and SmartWatch business that should smooth out any iPhone volatility! Plus, Apple will have a quarter of a trillion dollar to buy back the stock in any weakness! So, this WSJ article is garbage at best!
Like every other News Corp publication and network. With Disney buying their good divisions maybe they can use the cash to buy real reporters, and start having real news (like that would ever happen).
It seems all the FANG stocks have unlimited growth and the sky is the limit for all of them. Only Apple is in deep trouble despite sitting on a mountain of repatriated cash. Zero growth in the future and everyone on the planet who wanted an iPhone already has one. Historically speaking, Apple’s P/E is way too high for a tech company and must come down at least four to five points. EVERYONE is suing Apple on account of deliberately slow iPhone performance which is considered far worse than Galaxy S7 batteries exploding.
A trillion dollar market cap might as well be as far away as Alpha Centauri as far as Wall Street is concerned. Supposedly, all the FANG stocks have had a perfect end to 2017 and only Apple has flopped miserably.
/s
I give up. The news media has nothing better to do than smear Apple while ignoring all the other companies struggling for survival. I think it’s really odd that a company with so much money available can always be on the verge of a collapse. Is that a common problem for most companies? Exactly what can Apple do to re-rate the stock? Absolutely nothing, as far as Wall Street is concerned.
“Apple’s share price has already surged 47% — its best annual performance since 2010, when the company was worth about one-third its current value.”
I guess math isn’t the WSJ’s strength. But what’s $300 billion between friends?
You’re RIGHT, despite the down votes.
if you start with $200 and add 50% you’ll have $300. The $200 you started with is TWO THIRDS of what you ended with, not ONE THIRD as they claimed. (rounded for simplicity)
Not to mention that the main logic of their argument is equally flawed.
They claim that, historically, when apple reaches a PE of 15 their price tends to top off, as they expect it will now.
AND they claim that apple’s new tax benefits will “ONLY go to paying down its growing debt pile and boosting cash return”.
Don’t they know that paying down debt results in a LOWER effective PE (killing their first perceived impediment to a higher stock price), and boosting cash return increases yield, thus ADDITIONALLY justifying a higher PE to investors?
Sounds to me like the 47% is the surge within 2017 and the 1/3 of current value is comparing to 2010 value, 7yrs ago. Two completely different calculations.
Rereading the story above I have to agree.
Good point.
For fun, MDN should run a contest and let the commenters guess the day that Apple hits a trillion. Winner would get the Friday keg of beer. 🙂
It’s not beer Botty, it’s a cook book, I mean Kool Aid…
Instead of a deadpool a trillion pool
first smart thing you said this week – thanks for not going political. Prost!