Apple is set to open at a fresh record high of more than $500 per share ahead of its four-for-one stock split on August 31. The surge comes less than a month after topping $400 per share, and days after crossing the $2 trillion level for market value.
Martin Baccardax for TheStreet:
Just days after crossing the $2 trillion level for market value for the first time in history, Apple shares are set for a fresh record high of more than $500 per share heading into the Monday session as the world’s most valuable tech company extends its year-to-date gain past 70%.
“Over the last four quarters Apple has generated 6% year-on-year revenue growth, 12% year-on-year earnings growth, and 24% year-on-year free cash flow growth, despite iPhone revenue declining 1% year-on-year in the same period,” said Morgan Stanley analyst Katy Huberty, who carries an overweight rating with a $520 price target for the stock. “In our eyes, these results underscore the strength of Apple’s broad ecosystem of products and services,a change from past years where Apple was more reliant on the success of the iPhone to drive growth.”
Apple now accounts for around 7% of the S&P 500’s total market capitalization, and is worth more than the combined value of the benchmark’s 200 smallest companies, according to Reuters data and reporting.
The stock’s impact on the Dow Jones Industrial Average, however, is set to wane next week after the group announced a four-for-one stock split that will take effect on August 31. Monday’s pre-market gain, for examples, adds around 92 points to the Dow, based on its current share price in pre-market trading. A similar gain at $100.80 per share — when the split becomes effective on August 31 — would add only 23 points to the price-weighted average.
MacDailyNews Take: The news of the looming Mother of All iPhone Super Cycles finally seems to have begun being widely recognized, as evidenced by the string of record Apple stock prices. The surprise 4-for-1 split news was like adding nitrous oxide to AAPL’s engine.