Apple’s projected earnings growth rate indicates that the stock is built for terrific upside. And, the company’s entry into new markets could help it do even better over the next 10 years.
Harsh Chauhan for The Motley Fool:
The last decade has been a terrific one for Apple investors as the tech giant has witnessed a tremendous increase in revenue, earnings, and stock price thanks to the success of its various product lines and the growth of its services business.
The next decade, however, could be a better one for Apple, as it is reportedly working on new technologies that could help it tap into nascent but fast-growing industries that are expected to be worth hundreds of billions of dollars. Don’t be surprised to see Apple clocking faster growth over the next 10 years than in the previous one.
MacDailyNews Take: So much for “The Law of Large Numbers.”
[Morgan Stanley analyst Katy] Huberty estimates that entry into the autonomous electric car market could help Apple double its revenue and market cap in the long run. With the global autonomous vehicle market expected to grow at an annual rate of 63% through 2030 as per a third-party estimate, Apple could strike gold over here if it manages to deliver a compelling product and disrupt the autonomous vehicle market…
Apple could eventually dive into both the hardware and the software side of the metaverse. That would put it in a solid position to make the most of the multibillion-dollar metaverse opportunity. Third-party research estimates that the global VR headset market could grow at an annual pace of 28% through 2028, while the overall metaverse market is expected to clock nearly $830 billion in revenue by then.
The global smartphone market was reportedly worth $274 billion last year, and it is expected to clock an annual growth rate of 7.6% through 2030. At this pace, smartphone sales would generate close to $530 billion in revenue by the end of the decade. Apple is in a nice position to take advantage of this secular growth.
As a result, it won’t be surprising to see Apple’s earnings grow at a faster annual pace than analysts’ expectations of 15% for the next five years. If Apple clocks a 20% annual earnings growth rate for the next 10 years, its non-GAAP earnings could increase from $5.61 per share last year to almost $35 per share at the end of the forecast period.
The stock is now trading at 28 times earnings, and a similar multiple after 10 years would translate into a stock price of $980 based on the company’s estimated earnings mentioned above. That means Apple stock could rise nearly 470% over the next decade from its closing price of $172 on Feb. 11, which is why it would be a good idea for investors to continue holding this tech stock, as it seems built for more upside.
MacDailyNews Take: $980 per share? (Not counting any forthcoming split(s) over the next decade, of course.) Well, okay: from Chauhan’s lips to Mr. Market’s ears!
(Hopefully that 470% ten-year gain will be enough keep pace with inflation. 😏)
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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
“Hopefully that 470% ten-year gain will be enough keep pace with inflation”
Ouch! ‘Here is your latte grande, that’ll be 29 dollars’.
Katy Hubert leaves out buybacks. At 28 times earnings and with 3% buyback per year at a progressive rate, that’s about 40% increase in share price even if they didn’t grow (and theoretically kept the 28 PE). It also doesn’t count what’ll likely amount to a buck a share average dividend annually. It also is based entirely on ‘expected’ new products.
hard for apple to have any “unexpected” products given its size and complexity of its products (and supply chain).
even the iPhone was anticipated, and talked about for years prior to its debut
Your argument is that we all know what new Apple products there will be for the next 10 years?
Yes they knew about the iPhone, the Watch, AirPods — as in they ha some idea within a year or two. Again, the span is 10 years.
I don’t know why we are speculating on where Apple stock will be in 10 years. I have it on good authority (Greta, a little girl in Denmark) that life as we now know it will cease to exist by then. Climate change (aka global warming) will reduce what few humans survive to primitive animals struggling to survive. iPhones? What are they?
It would have been nice if 10 years ago Apple started concentrating on bringing home all of their manufacturing rather than creating a new car to be largely built overseas. Apple will likely have its manufacturing spread out over several countries to help them form a new technological OPEC. OTEC, Organization of Technology Exporting Countries..
Wouldn’t it be nice if Apple could say T&****(&^&^%7 to China and stop living for nothing but profit even at the cost of the human rights of the people of China? Apple is no better than the NBA.
Bust open the PC you’re using or the Android phone you’re furiously typing away on. Also, pop the hood on your car, open up the appliances in your house, dig into the origin of the materials for your clothes, even the thermostat, even the medical devices you may use. The China origin of devices or the parts that go into it or the material used to make the parts is a ship that has already long ago sailed. And I bet you were one of the first people to say “hey! look how cheap I was able to buy my Android phone!”.
I just did a search on total market cap of ALL stocks traded on U.S. markets… “$53,366,436.4 million (Dec 31st, 2021). The market value is the total market cap of all U.S. based public companies listed in New York Stock Exchange, Nasdaq Stock Market or OTCQX U.S. Market”
So, about $50 trillion, and AAPL is about $3 trillion. Apple’s market cap is currently about 6% of the entire U.S. stock market! This 470% growth prediction in ten years means Apple by itself would be 25-30% of entire market. Is that actually possible? One stock’s market cap is a quarter of entire (current) U.S. stock market value?
With inflation (more money), the total value of stock market may be somewhat higher, but these “experts” need to consider factors for AAPL that do not apply when analyzing smaller (more typical) companies. Total money available to invest is not infinite.
“This 470% growth prediction in ten years means Apple by itself would be 25-30% of entire market. Is that actually possible?” Your assumption that only Apple’s market cap would/will grow is the fallacy in your argument … 😏