The case for Apple hitting the $4 trillion market value mark

Will the first company to hit $3 trillion become the first one to surpass $4 trillion? The Motley Fool‘s Rick Munarriz makes the case for Apple hitting the $4 trillion market value mark.

Apple logo

Rick Munarri for The Motley Fool:

Apple stock isn’t exactly cheap, and at 33 times trailing earnings it’s a rich price for a stock that musters double-digit growth just once every three years. However, there’s something to be said about essentially cornering the market for people willing to pay a premium for phones, tablets, and computers.

Apple’s ability to command a healthy mark-up on its products makes it special, and that’s before we consider the high-margin power of its services segment, which now accounts for nearly a fifth of its revenue. Apple may be at $3 trillion for the time being, but the company itself has never been as potent as it is right now.

What if this isn’t the peak? What if the mobile 5G revolution extends the upgrade cycle?

Do you really think an Apple car wouldn’t sell briskly if it ever came out? Apple is unique in that it succeeds far more than it fails when it thinks outside the box. It’s true that the stock’s valuation isn’t for the timid, and it’s not as if its 0.5% yield is wooing income investors. However, Apple finds a way to make magic happen. Hitting $4 trillion would be just the next trick for tech’s ultimate magician that can always read your mind. It’s a gift that you don’t want to be against.

MacDailyNews Take: As we wrote early last month:

“The Mother of All iPhone Supercycles™ is a multi-year cycle in which we’re barely one year in.”

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4 Comments

  1. “but the company itself has never been as potent as it is right now”

    This is the key important and absolutely true statement. How Apple has put itself into this position is interesting, long expensive road and not without errors. But he they are and they are in a staggeringly potent position. Their advantage is almost at every level. Uniquely extreme control of their entire product stack to staggering gold standard brandname to massive financial resources to colossal user base and retention (and more). Outside of governmental headwinds Apple is currently as unstoppable as it gets. That doesn’t mean there may not be missteps but it is going to take a pretty big seed change to derail Apple in the near term (long term is always part of of the unknown).

    Investors take note and act accordingly.

    1. Don’t forget their potency in capital management…it’s really come to the point where this is the main business they’re in, and all the hardware and services are just a really pretty way of advertising themselves.

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