Cody Willard: Top 3 reasons why Apple shares are headed to $2000

Cody Willard’s top 3 reasons why Apple shares are headed to $2000:

1. Apple’s trading at less than 8x next year’s $30 per share in earnings when you include the $50BB plus in net cash the company has.

2. The products are the highest quality out there and nobody can catch that, not google, not softee, not sony not nobody

3. The platform that Apple has locked people into is the key….almost everybody who is now using iTunes will still be using iTunes in five years, the people nurtured on iPhones 1-5 will still be using iPhones #15-20 in 10 year, and everybody using facetime will still be using facetime, and you’ll be doing so much more inside that platform/eco-system that apple’s created. And that’s the real key. And it’s not about 2011 anyway. It’s about 2021 when you live surrounded by iOS in your home, your car, your office, your gadgets.

Read more in the full article here.

37 Comments

  1. This is getting ridiculous. Over a year ago we were told Apple shares would hit $600/share. It hasn’t even hit $400/share, and now we’re being told it’s going to go to $2K/share? Yeah, I know we had a “little” economic downturn in the last few years. Ya think that continuing economic problems might have a bit of a damper effect on share price? I’m an Apple fan, have been over two decades. But this is a bit much.

    1. It doesn’t work that way. The down turn can change the sales and growth of the company (which has not happened to Apple) but it does not change the EPS (Earnings Per Share) or the future EPS. Apple’s stock’e EPS is extremely low and will have to move up soon. If you look at Apple’s chart, this is just one of the sideways steps for this rapidly climbing stock.

    2. Yes, and that “little” economic damper pushed Apple down into the $80s. And yet, Apple continued to grow its revenues and earnings like gangbusters. This last quarter saw revenues grow by over 80% and profits by over 90%. How do “continuing economic problems” hold down a stock price of a company growing as fast as Apple?

      It may seem “ridiculous” to you, but that’s because you are focusing upon the price target. You should focus on the stock’s fundamentals, and just let the math lead you.

      Personally, I find stock splits useless, but in Apple’s case, I think a 10-1 split would help reset the market’s expectations. Like you, the market seems obsessed with the price being so high, without looking at the fundamentals which all indicate that Apple is undervalued. By dropping the price into the $35 range, I think investors will get past this mental block.

      1. A 10 – 1 split would help the foolish investor see that a $35 stock can easily go to $70, $100 or even $200. But a $350 stock can never go to $700, $1,000 or even $2,000 in their mind. They just can’t see past the zero. IT IS THE SAME THING!!! But, covering 100 shares of a shorted $1,000 stock is much harder!

    3. I agree. I hate listening to this kind of stuff when I see Apple stock sucking big-time. Apple has already met all of the target price conditions that were set a year ago that would put it’s share price close to $400 and despite record sales, nada. When these pundits start spouting trillion dollar market caps and such, you really have to wonder why hardly any individuals are currently investing in Apple. Seriously. I think these people are on some sort of delusion-causing medication. The more they push the stock, the more the stock drops, if that makes any sense at all.

      I don’t see Netflix or Amazon being affected by any economic downturn, if that’s the case. Actually, neither is Apple, but the stock says otherwise. If anyone noticed, Apple is down again today. Bulls consider it a slight detour to $600, but I don’t know about that.

        1. yes Markets are perpetually insane. Look at silver prices! Whats the number one use of Silver? Photography, old school film and prints developed from a lab. Is there any logical reason for a four fold increase in silver prices. Netflix is worth about 40 bucks a share tops. Amazon has missed earnings estimate for about 4 quarters in a row and margins are shrinking. Every time the stock goes up the analysts say how good it is that margins are shrinking so they can get more volume in sales! Best take margins to zero i guess.

    1. I bought Apple some options back in 2003, which made me $20k, but I had no idea Apple would eventually go over $700. Yes, $700.

      Back in 2003, was pre-split. Without that split, Apple would be over $700 today. So, no, I never imagined Apple going over $700.

    2. Not, but I did see something revolutionary and recognized it.

      Invested my young children’s college funds ($8500 total) and never put another dime towards their college. Yeah, now worth just under $300K.
      How’s that guaranteed college tuition plan working for everyone? Oh, they forgot to inform you about the “fees”………ah……..401k anyone?????

      $2000? That’s bold but I remember about five years ago someone predicting $600. Maybe now not so bold….

  2. You might want to read up on the darling stock of the 1920’s stock bubble. It was Radio Corporation of America.
    Invest based upon knowledge and verifiable facts- not hype, idle speculation or fanboism.

    1. How is Apple in a stock “bubble”? Are you related to Erin Burnett?

      People are looking at Apple’s fundamentals and pointing out that Apple is way undervalued.

      The last bubble, the dotcom bubble occurred because people were focused upon top-line sales and not bottom-line profits. Apple has BOTH top-line sales and bottom-line profits. This past quarter Apple grew profits by over 90%. Apple earned $6,000,000,000. Do you know how many companies earn that much money in a quarter? Less than a handful. When the next Fortune 500 list comes out in 2012, it’ll show Apple as either #2 or #3 in profits. Only ExxonMobil will have earned more than Apple. A bubble stock doesn’t have the profits to support the shareprice. Apple has the profits, and given its ridiculous growth rate, over 90% last quarter, it’s easy to see how people like Willard can project $2000 in 10 years. It doesn’t mean Apple will get there, but it’s not totally out of the ballpark.

      1. When the entire U.S. Dollar bubble collapses, and the entire U.S. Debt bubble collapses, and the entire stock market bubble collapses (yes, it is still in a bubble), it will take down Apple with hit… regardless of how good Apple is doing. Everything is inextricably linked. Read the book “Aftershock” and other books like it.

      2. No, but I wouldn’t mind having relations with Ms Burnett…

        I have owned Apple stock since it was less than $10/share & my only regret is that I did not buy more- sooner. That said, $2k/share is nonsense unless there is an awful lot of inflation.

        At some point, Apple’s phones will run into the “PC problem” where the bulk of buyers are satisfied with what they have and stop upgrading with every refresh. The market will eventually saturate and sustain at a lower sales rate. Same for the iPad.

        Apple is growing and will continue to grow, but size changes everything. Elephants rarely tap-dance and when Mr Jobs leaves the building I seriously doubt anyone else will command the authority to run Apple like the flat model of management they currently have. Bloat will creep in.

        I’m not a pessimist, but $2,000/share?

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