Analyst: Apple could surge to $1 trillion market cap again on U.S.-China trade deal

Sam Unsted for Bloomberg:

A resolution to U.S.-China trade tensions could add as much as $25 a share to Apple Inc.’s stock price and take it back to a $1 trillion market value, according to Wedbush Securities analyst Daniel Ives. A $25 increase would be about 13% above Apple’s closing price of $194.15 a share on Thursday and would take its market value back into 13 figures.

Apple in August became the first U.S. company with a $1 trillion value, though it’s been below that since November.

A U.S.-China deal “would take away the primary China risk which is a dark cloud over the stock now,” Ives wrote in a note. Investors now are pricing in a harsher impact on Apple than Ives sees playing out based on how the situation stands today, “despite the noise.”

Ives also said the risk-reward on Apple remains compelling at the current price and that the company is the safest among FAANG stocks from any antitrust threats.

MacDailyNews Take: One might expect that a U.S.-China trade deal would have a positive effect on stock prices, Apple’s included. That said, the market is an unpredictable beast, as always.

4 Comments

  1. And pigs could fly if they had wings. Apple is not a stock to be trusted to move as some analyst says. Remember all the talk about the “law of large numbers” when Apple was approaching $1T market cap. I have not heard one mention of that term with Microsoft comfortably sitting above $1T. It was easily accepted Microsoft is worth $1T although nearly everyone doubted Apple could be worth that much. Apple stock will continue to roller-coaster due to all sorts of investor doubts surrounding the company. The market is unpredictable but Apple is even more unpredictable. iPhone sales are still declining with no slowdown in sight and Apple’s stock performance will be tied to iPhone sales for years. I’m just puzzled how Microsoft easily blew by Apple in value but that could be due to having so many outstanding shares. Of course, institutions see Microsoft as being a better investment than Apple. You can’t go wrong by choosing Microsoft, or so the saying goes.

    So even if Apple does get back to a $1T market cap, there is no guarantee it will stay there if past performance is an indicator. Amazon will likely be the next stock to reach $1T quite easily while Apple struggles along. Any negative rumor can send Apple stock into a death spiral and there isn’t anything Apple can do to change that fact. It’s just the nature of Apple. I have accepted that fact and will simply have to live with the volatility of Apple stock. However, as long as Apple keeps raising dividends, I’m quite satisfied with that. I have high hopes the new Mac Pro will be a successful product and have much higher sales than the trash-can model ever had.

    1. Microsoft’s recent improvements and marketshare gains in their cloud business along with partnerships with such companies as Sony in cloud gaming have helped bolster and solidify MSFT. It is possible that Wall St. appreciates companies that appear to work well with others.

      As for being ‘safest’ from anti-trust threats. The single topic of Apple’s App Store being a possible monopoly is significant enough to affect Apple’s bottom line should changes be required to allow for 3rd party iOS app stores and/or reduction of app/in-app sales ‘commissions’ Apple receives.

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