History suggests Apple has much more room to run

“The world’s most valuable company could become a lot more valuable if history is any indication,” Michael Newberg reports for CNBC.

“With its recent run, Apple’s total market capitalization is now above $750 billion,” Newberg reports. “And while that figure boggles some traders’ minds, a closer look at the singular mega-cap leaders of the S&P 500 throughout the last 30 years suggests that Apple’s market value could balloon to more than $1 trillion.”

“After Monday’s earnings beat, Cantor Fitzgerald analyst Brian White upped his price target on the stock to $195 per share, which would bring the company’s market cap closer to IBM’s percentage of the S&P 500 in 1985,” Newberg reports. “If Apple were to achieve the same percentage of the total market that IBM did in 1985, its market cap would be a staggering $1.28 trillion dollars.”

Read more in the full article here.

MacDailyNews Take: Bu, bu, but the “Law of Large Numbers!” (smirk)

Again, with Apple, we haven’t seen anything yet.

7 Comments

    1. Wall Street sees Apple’s overseas cash as having zero value because they believe Apple can’t do anything with it. I certainly haven’t heard of any tax holiday on the horizon.

  1. The big difference with Apple is that it is not reliant on one or two products, e.g. Walmart sells stuff from box stores, Microsoft has Office and Windows, Nokia had feature phones as its real product, GM sells cars.

    Apple also does not have the big company mindset: It didn’t get big and circle the wagons simply to protect the territory it had carved out for itself (again, see Microsoft, Blackberry, etc.). Apple continues to act like a startup company by working very hard to find new products that can integrate with its existing products and help people live better (albeit a startup with HUGE venture capital funding!).

    Why is this important? Because the other companies which follow the “rules” of Wall Street and college business professors (who don’t actually run businesses) get big and then assume their growth has to slow, stop, or it’s time to sell the company. Apple, OTOH, isn’t really concerned about the size of the company, but instead about continuing to redefine and reinvent its existing products as well as inventing new products or revitalizing existing underserved markets. Apple’s focus is, “Wouldn’t it be cool if you could do X. Let’s make it happen.”, while most other large companies focus on “Let’s keep the other guys down below us.”

  2. Nothing goes straight up. Nothing goes straight down. If price is considered below value, price auctions higher in search of sellers. If price is considered too high by the market’s participants, price auctions lower, searching for buyers. It’s auction market theory at work.

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