What’s Apple worth? The sky’s the limit!

“Apple (AAPL) shares are hitting another record high,” Matt Krantz writes for USA Today. “And it seems like there’s nothing that can stop it — not even price targets.”

“Shares of the smartphone-maker keep blasting blast analysts’ price targets almost as fast as the analysts can raise them,” Krantz writes. “Apple’s breathtaking rally this year — powered by strong uptake of the iPhone 6 smartphone — continues to mock analysts’ price targets rooted in fundamentals and valuations as emotion and speculation takes over.”

“The highest 18-month price target on Apple is currently $143 a share,” Krantz writes. “That might seem outlandishly high, especially since the stock is already trading at 17 times its earnings the past 12 months. But analysts have learned the hard way that you’re either bullish on Apple, or you’re wrong.”

Read more in the full article here.

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36 Comments

  1. Enough to buy Google. They should just do it before Google’s market cap gets any higher. Go ahead and give this one star, but Google is involved in more than just crap android (that’s the least of their concern), and Apple could benefit from Google Fiber, Google X, search, webmaster tools, YouTube, and Google’s resources and assets etc etc.. I really think if Google were transformed by Apple, the entire web would be a better world. By disagreeing with this, you’re actually saying that you like Google’s stuff just the way it is, and never want to see it brought up to an Apple standard.

    1. Open Letter to Tim Cook:

      Dear Tim,

      Apple has a solid and focused strategy geared toward the future, with great products such as a promising HomeKit, a very successful Apple Pay, and a revolutionary new Apple Watch. These products will be great in ushering in the next decade of consumer technology. However:

      1. A significant change is coming that will change the world and humankind: the singularity…

      There is, however, an inevitability that is quickly approaching us within the next few decades, further out than an outsider’s visible insights into Apple’s strategy toward the future; an advancement so profound it will render previous human achievements insignificant; one where arriving at the conclusion may be all that matters: a technological singularity.

      There is no easy way to describe the full magnitude of a change this significant, but to summarize a few key points:

      – Technology will begin outpacing fathomable expectations.
      – Advanced artificial intelligence will become one with humans.
      Humans will reach a level of intelligence where current times appear very primitive.
      – This will be an evolutionary movement forward, and those resisting it will be resisting evolution.

      There are a few references I would like to recommend for further information on this subject:

      – Detailed book: The Singularity is Near: When Humans Transcend Biology, by Ray Kurzweil, 2005
      – Summarized documentary film: The Transcendent Man, 2011
      See a glimpse of possibilities in fictional film inspired by Ray’s work: Transcendence, 2014
      – News on advancements toward singularity: http://www.kurzweilai.net

      2. Ray Kurzweil, now working for Google, is leading the way toward this change with as much funding as will be needed…

      The most important important consideration from this is that Ray Kurzweil has a significant understanding of the singularity, the requirements that would need to be in place beforehand, and foresight into what conditions will be after such time. In December 2012, Ray was brought on board full-time at Google as a Director of Engineering, a company willing and capable of funding and conducting research and development dedicated to building the necessary prerequisites to arrive at a singularity, all under the guidance of Ray Kurzweil.

      Since Ray was hired, and not once before then, Google (and more specifically a division called “Google X”) began a massive trend of multi-million dollar acquisitions in the fields of advanced artificial intelligence, language processing, and robotics. Ray is being given a full opportunity to develop and realize a technological singularity, because Google understands that an investment of this nature has exponential potential rewards and that Ray is exactly the right person to oversee the progress. Everything Google X is doing, and has been doing, is working toward a technological singularity. Even the laughable Google Glass, which may not be so laughable once it is advanced enough to fit on a contact lens or to even further when it flows within our cells integrated in our retina.

      3. Getting there first is all that will matter for an advancement of this scale…

      We use our current technology to develop the next technology, which is one of the driving forces behind the exponential growth in technology. If Google achieves even a small fraction of the foresight Ray discussed in many of his non-fiction literary works, it will become the most powerful and intelligent entity in the known universe. With Ray on board and funding and resources being pushed toward these efforts, Google will succeed in achieving a singularity scenario under their control. If Google gets there first, something this significant will quickly exceed the capabilities of any competitor looking to achieve similar results. An advanced artificially intelligent entity would be able to further advance itself at an exponential pace, immediately making all other technologies obsolete and irrelevant.

      4. Apple should seriously consider the benefits of acquiring Google for this reason alone, while it has a small window of opportunity (not to mention the benefits on the side of current enterprise offerings)…

      In the distant future within our lifetimes, someone representing a major technology corporation will be standing on a stage and will host an unprecedented and profound event, showcasing the most important advancement any living human has ever witnessed. I want that company to be Apple.

      Apple’s focus must be concentrated; however, there is no reason Apple could not allocate a portion of its cash reserve combined with new debts to acquire Google before its market cap begins reflecting its investments in these fields. Once Google begins applying their advancements toward an earning potential, the financial markets will quickly react, and the window of opportunity where Apple is positioned to be able to make such an acquisition will close. At the moment, Apple’s cash reserve accounts for 10% of all US corporate cash, making Apple the most likely of any company to even be able to consider an acquisition of Google.

      I am sure Apple already has its own strategic plans for its cash reserves, and those preexisting plans may very well bring valuable new products and services to the world in exciting ways, while also being profitable for the company. However, if Apple were to acquire Google before its investments in Ray Kurzweil and its bet on the singularity are realized and pay off for not only Google but for all of humankind, it will not only have a remarkably higher return but will also put Apple’s name in the history books.

      5. It will be important for a change this significant to be delivered with the care typical to Apple, and dangerous for it to be handled by what is typical for a modern Google…

      Right now, there is consumer debate between Apple and Google with external device technology: smartphones, tablets, etc. Although it is clearly unmistakeable to most people that Apple is the winner in the realms of design, functionality, features, security, privacy, reliability, safety, and many other strong points of importance, Google releases products that are not quite up to this standard. While it may not matter much to consumers now, it will matter significantly more when it is a debate on the scale of internal bodily technology, especially ones that would interact with the synapses in the brain to improve our capacity for thinking, computing, connecting, integrating, memory and many other levels.

      Please realize that Apple researching these fields from scratch and without being willing to allocate significant capital toward just as much funding for acquisitions as would be needed to acquire Google, we are doubling efforts rather than working together to bring such a change to us faster and within our lifetimes. The work Google is doing in this specific field alone is without a doubt going to be the most important investment a company has ever made. Betting against this inevitable change would not be wise, especially with Google actively engaged in pursuing it. Do not allow Apple’s tight focus, that benefits it so well, to also limit its foresight into this type of future. Apple has a chance to usher in a safer, more reliable and seamless transition into a transcendence beyond biology.

      1. I guarantee if you wrote that to Mr. Cook, he didn’t read it. Hell, I gave up before I even half way through your first point.

        A wise man once told me, “be bold, be brief”.

        1. Do you really want your brain, consciousness, and entire being to exist through Google services, or would you prefer Apple? If you don’t agree with what I’m saying then go sell your iPhone and Mac and get rid of iCloud and Apple Pay, welcome to Android, piracy, ID theft, bugs, and malware.

          Google has unprecedented funding and massive amounts of it are being put toward proactively insuring a singularity occurs under the ownership of Google. I would rather see that under Apple, who would handle it much better.

      2. I doubt Apple would ever do something so bold as you suggest, but it is an extremely thought provoking idea.

        I’m surprised how few people are aware of the coming radical transformation that the “Singularity” (weird name) will be.

      3. Great strory. But the more likely scenario is that Google will continue to attempt to produce great tangible hardware products but will continue to fail and will over and over again realize that they make their money selling ads, and all their focus will be on on ways to sell more of them. They’re very good at developing marginally useful stuff but selling those things to everyone through their own promotional advertising. Make ads to sell more stuff to sell more ads, and make consumers and businesses believe their way is the way to go by endlessly pounding away with ads claiming great products, when in reality, their stuff is just good enough and full of Google ads.

      4. it’s all B.s
        Google hires all these people to work on projects like Google Glass (which losses money) to BOOST THE STOCK PRICE. Having projects like this brainwashes the big investors to buy Google stock (“Hey they are going to build the next iPhone” ).

        google’s P.E (valuation) is TWICE apple’s because of this . If Apple had that valuation the stock would be 200 now.

        Google’s REAL interest and 95% of all it’s earnings is ADVERTISING, they got rid of Rubin head of Android because Rubin had no clue how to MONETIZE Android to generate more ad money. Android is widespread so as a technology it can be considered ‘successful’ but instead of celebrating Rubin they removed him from being Android head because all Page and Brin and Schmidt REALLY care about is Ad dollars which Android is failing spectacularly.

        When they implement something like google Wallet it’s to get your data for ADVERTISING purposes, they don’t really love tech for itself or try to ‘change the world ‘ as many naively believe.

        Goog’s love of ‘Advance Tech’ not related to advertising is as fake as ‘Do No Evil’. ( Do No Evil: remember them stealing Wifi data from houses all around the world, illegally digitizing authors and artists works without permission to monetize on their websites – losing numerous lawsuits in the process , hacking through safari safeguards stealing Apple secrets ETC … )

        1. missing comma,

          “hacking through safari safeguards stealing Apple secrets ”
          should be
          “hacking through safari safeguards, stealing Apple secrets ” as they are separate things,

          Google was fined 22.5 million for hacking through safari privacy safeguards. So much for “Do No Evil”.
          Google was and is based veils of B.S.

      5. No, no, no, no, no.
        If it is important, I believe Apple is already all over it. Even if no one knows.

        As for anyone who wants to buy Google: wait and buy it cheaper. It is a lot like Amazon: a one-trick pony. And I believe their share prices must inevitably go down. They are essentially low-tech businesses (online ad placement for Google, and mail-order for Amazon) that have somehow managed to cultivate a perception of being high-tech industry leaders by the financial, investor, & media industries. Go figure. But if something cannot go on forever, it must eventually stop.

        Besides, Apple is unlike Google in every way. Some people can see these sorts of things, and some cannot. But it is not a Zen koan or anything. The signs are there for all to see. As someone once put it: “The future is here already, you just need to know where to look to see it”.

  2. I agree that Apple’s valuation could go very high. This won’t happen on the back of the iPhone alone. Apple has figured out a way to patiently develop new products that can be sold to large numbers of people for high margins. Analysts and many so-called investors tend to look for quick hits or guaranteed profits. Apple is a playing a longer game.

    The Watch doesn’t look like it will be huge out the gate according to conventional wisdom, yet I’ll bet that two years out it will be key to more Apple success.

      1. Everyone says Apple Pay won’t move the needle for Apple. Hundreds of millions of dollars mean nothing to Wall Street anymore unless it’s coming from some start-up company or some company that has been granted some outrageous P/E based on future growth potential.

  3. “That might seem outlandishly high, especially since the stock is already trading at 17 times its earnings the past 12 months.”

    Already trading at 17 times its earnings? So what? Microsoft is trading at 19 times its earnings. Google is trading at 28 times its earnings. If anything, Apple is trading at a discount.

    1. I absolutely can’t reason why Microsoft’s P/E is that high. All everyone talks about is mobile growth and Microsoft doesn’t have it. Maybe it’s about betting how Nokia is going to turn things around for Microsoft and suddenly everyone is going to want a Windows Phone. I’m definitely missing something about Microsoft’s valuation on Wall Street. The company doesn’t seem much different from the Microsoft of two years ago when it was at $30 a share except for maybe offering a higher dividend. Forget Google. I don’t get that 28 P/E at all. We’ve already seen Google miss earnings so it’s not a given.

  4. AAPL will inevitably increase. Apple is making so much and they have said they will buyback shares. If AAPL goes down I’m sure they are happy to buy more and prop it back up.
    It’s inevitable. AAPL can’t go down.

  5. So, the author says that “analysts’ price targets rooted in fundamentals and valuations.” I think not. They are using the so called law of large numbers to price AAPL. It’s not a law and it’s not a formula. It’s a gut instinct that tells them that AAPL can’t possibly continue to grow rapidly because the cap is already so large. They aren’t looking at the actual numbers because if they did the stock would be valued much higher.

  6. Hmmm, too bad I sold some (not all thankfully) at $105 just a few weeks ago. I figured as soon as I sold it would start to go through another spurt.

    But things seem to have changed too in regards to the markets prior false competitive perception of Samsung and Google. Let’s hope it stays that way.

  7. At some point the pressure to cash in will be too much on the brokers. I’m thinking it could be ~120, maybe 130.
    Some may sell some stock and buy back in when it goes down to 100.
    I’ve tried this before and got burnt like peter.

  8. “Apple’s breathtaking rally this year…continues to mock analysts’ price targets rooted in fundamentals and valuations.”

    Ex-frickin-scuse me? If those analysts’ price targets were “rooted in fundamentals and valuations,” AAPL would be at $150 today, not $111.

    “The highest 18-month price target on Apple is currently $143 a share. That might seem outlandishly high, especially since the stock is already trading at 17 times its earnings the past 12 months.”

    WTF? If AAPL at a P/E of 17 is “outlandishly high,” how would he describe is GOOG at 30 or Amazon at ∞?

    So stupid…

  9. 17 x earnings isn’t particularly high for a good growth stock. I’ve been arguing for years that AAPL has been vastly undervalued. The market is now coming around to recognized AAPL for what it is: an anomaly. A corporate behemoth that falls into the Growth category, where we are used to seeing relatively higher P/E’s.

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