Do Apple shares have room to run beyond $100?

“As Apple continues to make new 52-week highs, and noted analysts are raising their price targets, investors need to consider how much room the stock still has to run higher,” Douglas Ehrman writes for Seeking Alpha. “As launch dates for the iPhone 6, the next generation of iPads, and the potential introduction of the iWatch begin to firm up, the typical Apple buzz is already beginning.”

“Couple new device news with a solid earning call last week, and the stock looks poised to move significantly higher,” Ehrman writes. “Given Apple’s typical pattern surrounding the release of each major iPhone redesign, establishing a position in the stock, especially at sub-$100 levels should be profitable.”

“As is too frequently the case with bellwethers, Apple’s solid third quarter results were overshadowed by consensus estimates. The company reported earnings of $1.28 per share on revenues of $37.4 billion, but the street had been looking for $38 billion. Similarly, Apple sold 35.2 million iPhones, falling short of the 36 million that were expected,” Ehrman writes. “This is not to suggest that analyst estimates should be completely overlooked, but selling enough iPhones to equate to more than 10% of all people living in the U.S. seems to exceed ‘”unspectacular,’ which is how the number was described.”

Read more in the full article here.

17 Comments

  1. A key constraint is how much NEW investment it takes to move AAPL up even $1 in price. There are currently about six billion shares outstanding. Therefore, a $1 increase requires about $6 billion in new investment.

    AAPL will almost certainly cross $100 and hit an all-time high in the near future. From there, to get to $200 requires about $600 BILLION in new investment. That is A LOT of money, and that’s not money that investors collectively have laying around in cash equivalents. It’s not “easy” money.

    BEFORE the stock split, AAPL was going up an average of about $100 per year, for the last five to six years (leveling out for the wild price swings above $700 and back below $400). Adjusting for the stock split, that increase is in the $10 to $15 range per year. A $14.3 increase now is that same as a $100 increase before the stock split. And THAT is a more reasonable expectation for AAPL going forward, along with the dividends (which will probably also go up steadily over time).

    1. Agreed. That’s work that out as an average per trading day and you’re talking pennies so not unreasonable, but over the year that’s an amount of growth I’d be perfectly happy with. It’s certainly way better than what you’d get with your money in cash, and as stocks go AAPL is hardly what you’d call a huge risk.

    2. it might not actually take billions in investment.

      market value is just based on the closing price not how much money has been poured into investments in aapl stock.

      take a wild theoretical example:
      if on one day someone offers a share at 200 bucks and someone buys it at the closing bell the closing price is 200 and if you work out the market value of apple it’s based on that price (200x millions of shares out) but the rise only took one share at 200 bucks.

      1. That is nonsense. There are 6 billion shares outstanding. It would be almost impossible (right now) for one person wanting to buy AAPL to ONLY find that one person who is selling for $200. And even if that actually happened, $200 would not be a sustainable price. And if $200 is the sustainable price, then that means the current trading price for AAPL is actually $200, and Apple would be worth about $1.2 TRILLION.

        If AAPL is priced at $200, that means someone was willing to sell for $200 AND someone was willing to buy for $200. A “trade” occurred at that price. And the total investment tied up in Apple is $200 times the number of shares outstanding.

        Think of it this way… If I own ONE share of AAPL at $100, my investment in Apple is $100. That’s how much I have tied up in Apple. If I own 1000 shares, my investment in Apple is $100,000. If I somehow managed to accumulate ALL shares of AAPL, my investment in Apple is (about) $600,000,000,000.

        1. I said it was ‘wild’ example to exaggerate to make my point clear.

          you’re still not getting what I mean.

          ” And if $200 is the sustainable price, then that means the current trading price for AAPL is actually $200, and Apple would be worth about $1.2 TRILLION.”

          , Yes, on paper apple was theoretical worth 1.2 trillion but that MIGHT NOT mean 1.2 trillion WAS SPENT on aapl by investors for it get there.
          get that?

          I’m trying to explain it does not mean that investors need to spend EQUIVALENT amount of money to the market share value of the stock as market value is just based on the closing market price. Much smaller amounts invested by people pushing the price up might make the stock theoretically worth 1.2 t.

          “here are currently about six billion shares outstanding. Therefore, a $1 increase requires about $6 billion in new investment.”
          What I’m saying is that IT MIGHT NOT NECESSARILY (in your example) require 6 billion in new investment (6 billion to be spent) for the price to be pushed up. A much smaller amount spent pushing the closing price up might do it.
          think about it.

          1. > Yes, on paper apple was theoretical worth 1.2 trillion but that MIGHT NOT mean 1.2 trillion WAS SPENT on aapl by investors for it get there. get that?

            Yes, of course I get that… But that is why I said about $600 billion in “new investment” was needed to get AAPL from where it is NOW to being $100 higher in price, following any reasonable scenario, where AAPL price increases incrementally over time (with BOTH up and down movement), not $100 overnight by magic. Because movement is BOTH up and down, it is possible (probably likely) that MORE THAN $600 billion may actually be “spent” by investors, to get AAPL to $200.

            So, AAPL at $200 would makes Apple worth about $1.2 trillion, and it will take about $600 billion in NEW INVESTMENT to get to that point from where AAPL is today (in the “real world”). That’s what I said in my original post…

            Closing price is one thing, but there has to be ongoing trades at any give price for it to be sustainable. Otherwise, it’s just a “glitch.”

        2. Apple trade volume js about 10% of the float!! Every share does not need to get traded for the value to go up !

          And i dont get the point of your last paragraph? You are just repeating numbers that make up the market cap.. At 95 apples market cap is 575 billion… At 100 it will be close yo 600 billion. So?
          Plus it is not necessarily true that if u have a 1000 shares your investment in Apple is 100,000. .
          Your investment is the priced you paid when you bought the shares.. The rest is cap gains or loss!

          At the end if the day there are three major factors contributing to where the share price will go!
          Apples earning!
          Apples Growth and momentum and stability … Effects pe multiplier
          Number of shares outstanding. Effects earnings per share !
          PPS= eps ( twelve month trailing ) x pe
          Im confident apple will go to about 110-115 in the next year and then beyond.

          1. All of those factors are important. But the vast amount of investment capital (already) tied up in Apple will become a factor as AAPL goes higher. And it’s “unknown territory,” if AAPL gets up to $200 (and I think it will at least get that far).

            In late 2013, the entire NASDAQ market was worth about $6 trillion. (I could not find a source that gave me a day-to-day value of the total NASDAQ market.) That’s the TOTAL market cap of about 2600 companies, including Apple. When AAPL reaches $200 a share (with the current number of shares outstanding), Apple BY ITSELF will be worth $1.2 trillion.

            The NYSE is a separate larger market, but still… You don’t think ONE stock having such a high percentage of the TOTAL stock market cap will NOT be a significant factor in the performance of that ONE stock? You think it will only be about the “three major factors”? If you think that, you are naive and not looking at the “big picture.”

            Already, AAPL is NOT a typical stock (to be compared using traditional measures), and as it goes higher, it will become even LESS typical.

            1. Your concern .. If it becomes a significant issue in the overall market will be addressed through the P…! The second factor i mentioned !
              So yes at the end i think the 3 factors i mentioned are the main contributors to the stock value !

        3. You’re close. Stock value is really just driven by sentiment.

          If EVERYONE holding Apple stock suddenly decided that thy wouldn’t sell for under $125/share, then people wanting to buy will have to pay that, and the stock price (and market cap) would suddenly jump 25%. Ditto for any other price.

          So it’s purely about how confident existing investors are, coupled with how desperate wannabe investors are to get the stock.

    3. “There are currently about six billion shares outstanding. Therefore, a $1 increase requires about $6 billion in new investment.”

      Er, no. Share prices are the result of the marginal trade. It requires only one share to be traded to set a new price a $1 higher than the previous price. All that is required is that sellers refuse to take the lower price.

  2. C’mon. The shares have yet to reach $100 and now this Ehrman is talking about beyond. Let’s not be so hasty. They’re talking about market corrections and that could definitely be a hindrance to Apple’s shares running wild. Apple will get there when it gets there.

  3. The answer is simple, a resounding NO.
    It does have room to climb beyond $100.
    Folks be careful following these articles, running up a mountain is dangerous, climb and pack the proper gear. Pay no attention to the Wall Street Whore below yelling “Manipulators, manipulators, manipulators.”

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