What Apple investors should be watching

Apple is coming off the COVID-19 year during which the company grew its top line just 6% annually, but investors should be excited about its most recent quarterly performance and what the company has in its pipeline.

Brian Withers and Matthew Frankel for The Motley Fool:

On a Fool Live episode… Fool contributors Brian Withers and Matt Frankel discuss why this massive tech company could become even bigger in the years ahead.

Matthew Frankel: I think investors are really discounting just how much potential Apple has in areas like healthcare and cars. Three big reasons. One, they have tons of capital to invest. If they want to spend $100 billion to design a perfect car, they could do it if they really wanted to.

They have the stickiest customer base of any company I’ve ever heard. People will buy ahead product just because it has Apple on it, especially if they have other products because they are so compatible with each other and not so much with other devices.

They also have insane pricing power. We think of cars as just not a high-margin business. I mentioned General Motors trades at less than one-time sales because it’s not a high-margin business. It’s very capital investment. Apple can have a higher markup on their eventual car than any other automobile manufacturer in the world. People will pay it, because it’s an Apple product and it will pair well with all their other things. So it is the same with health devices for that matter. So I think Apple has a ton of potential in all of those areas.

MacDailyNews Take: Frankel says that Apple’s current $2.x trillion market cap “could be half of what their potential is over the next few years.” He might be undershooting.