Who wins if Apple’s stock doesn’t skyrocket at earnings?

“After reaching highs above $700 last year, Apple’s stock collectively earned itself bragging rights as being the world’s most valuable public company,” Daniel Eran Dilger writes for RoughlyDrafted. “But since then, the company’s shares have plummeted in value. Why, and will this change when Apple releases its spectacular earnings [later today]?”

“Pundits have been offering us lots of explanations, the first and most loudly incessant being: Android is taking the world by storm!” Dilger writes. “It’s been over five years since the iPhone hit the market, and Apple continues to make more than 70% of the revenues of the entire industry.”

Dilger writes, “Who wins if Apple’s stock doesn’t skyrocket at earnings? Well, everyone. And nobody. Because it doesn’t matter. Apple controls markets and its competitors are begging for scraps. One can’t inhale +$10 billion a quarter and really be worried about what punditry chats about one’s value. It’s going to be really hard to keep Apple’s market cap artificially low for very long however. Once Apple’s stock doubles to reach $1000, then we can rationally discuss the potential of it continuing to increase on the merits of new products and spheres of business.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]

19 Comments

    1. This is actually the most “scientific” analysis I’ve heard: A company earning profits of $10 billion each quarter will eventually see its share price double.

      Everything else I read out there misses this one key fact.

    2. Did you understand the article? Did you actually even read it?

      Dilger argues that analysts are full of $h!t (…what punditry chats about one’s value…”). About the only thing that approaches “analysis” in his article is his suggestion that only after AAPL reaches $1,000 can we begin to talk about the limits of stock growth as a representation of the new products and services.

      1. Pre–,
        Do you actually read what most of these ANAL…yst are saying?

        If so, they you must believe that Apple will be dead and gone by the end of the year. Right?

        Just a thought.

        1. eldernorm,

          I’m not sure what is the point of your message.

          Let me rephrase what I said above. Most analysts seem to be complaining (for the AAPL fall) and projecting further doom and gloom for the stock (ignoring the finances completely).

          Daniel Eran Dilger seems to be saying that these analysts are full of it, and that only after AAPL ends up reaching at least $1,000 (making the market cap almost three times as large as the second-largest company on the market, currently Exxon-Mobile), that we may even begin discussing the possibility of growth limits for the stock. In other words, as Apple continues to report higher profits from quarter to quarter, AAPL should continue to correspondingly grow, at least until it reaches $1,000.

          What part of what I said had implied that I personally believe that Apple would be dead and gone by the end of the year???

      2. So the point about Apple reaching $1000 is valid? On that point his analysis is correct? Talk about pick and choose. Have you ever heard of the word objective? Jeez! Analysts are stupid unless they say something positive about Apple? Wow! I’ll have some of what ever you’re smoking.

        1. I’m not claiming it is valid. All I’m saying that Dilger is NOT an analyst, he is NOT offering analysis, and the only part of what he’s saying bears some resemblance to analysis is the part where he mentions the $1,000 price target. All he says is that the analysts who project doom and gloom for AAPL have it wrong, as the company is one of the best performers out there and continues to rake in record profits.

    3. It’s not a scientific analysis, it’s a story describing a disconnect between garbage headlines searching for clicks and the actual value of Apple as both security and company. Vapid (or better, trite) and unscientific are words better suited for the kinds of articles the piece above means to discredit.

  1. Wall Street was disappointed with Apple’s earnings most of last year, so I’m already in acceptance mode. I see Google’s shares taking off, I see IBM’s shares taking off, I see Intuitive Surgical’s shares look like an atomic bomb was set off under them. I can only imagine Apple’s shares will either be flat or fall. That’s the way it is for Apple shareholders. No matter how much money or profits Apple made this quarter, Wall Street is going to yawn and claim Apple is done for. I expect the P/E to easily be in the 10s range as the news media continues to hammer Apple with gloom and doom articles.

  2. Apple’s stock is about 5x it’s cash holdings. Apple’s cash will be growing faster than it’s stock value. At some point, $1,000 will be 1/4 or 1/2 cash. Plot it out. Is it 5 years? 3 years? This will happen unless something big happens like real AI.

    1. I don’t think real AI is necessary. NFC-enabled devices done right could bring in an enormous revenue stream into Apple. Think of it as iBanking. Comprehensive charts on where you are spending your money, etc. Don’t know how stores will get involved. Apple might have to get into point-of-sale, which could be tricky.

      Television is another area that they could get into. The existing Apple TV box with the ability to download apps, an improved advertising interface (think ordering pizza from local restaurants), Siri and better integration with iOS devices. The content providers will come eventually. I think infrastructure agreements could be problematic, but if any company can get around these issues, it’s one with the financial resources (and smarts) of Apple. (Google Fiber is looking to be more of a failure than a hobby, BTW)

      AI is something they should always be working on, but they don’t need a breakthrough soon (though eventually they will).

  3. For years now “they” have loved to push APL down, knowing it will bounce back up, and profits can be made on both movements.
    Dilger is saying “Hey. Look at the forest not the trees.”

    Stock value is base so much more on perception than on value.

    What would happen if Apple put some of its cash into a by back fund that was used strategically to work against the short sellers? Make it a bit more risky for them. That would be fun.

    1. Stripping your message of expletives, I get “Apple aint [sic] doubling”, and would like to know, what particular scientific (empirical) method have you used to derive such conclusion?

  4. AND, every screwball. bottom-feeder, un-employed ‘pundit’, barely legal self-proclaimed day-trading guru and Asian leak merchant alive, everywhere, will be squeaking and squawking that Apple is a has been and Android/Winders/other have taken all the luster away from the ‘brand’ and every made-up, BS excuse that’s ever been blasted across every news socket/cycle IN THE SOLAR SYSTEM will be ablaze with ‘facts’ why Apple should be selling for $99.50 a share and be forced to do a reverse 15 to 1 split so they regain the luster of where the stock was trading when it was at $ 8.00 a share….

    AARRRGGHHHHhhhhhhhh…..

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