There may be some correcting ahead, says Tech.Pinions’ principal analyst, but not a big hit.
While I don’t do the whole financial model thing, I do read way too many buy-side notes from some of the notable large banks. Many of those notes I read are on Apple. Most analysts had Apple’s end of year price target in the $220-$230 range. If you follow Apple stock, you know it is now hovering in the $310-$315 range. So the question is, why is confidence rising?
It feels as though confidence in Apple stock is rising the same way it did right after the launch of the iPhone 6 and 6 Plus. A time when Apple was adapting its iPhone strategy to cater to larger bases of customers. Apple saw several stellar quarters, particularly in China, and sentiment around the stock was as strong as ever.
Interestingly, the stock stayed relatively solid until Apple’s first revenue warning in late 2018. Now, while the current uptick in Apple’s stock is a bit steeper than past ones, and there may be some correcting, I don’t think the stock will take a dramatic hit due to returned confidence in Apple’s fundamentals as a business and the upside in adjacent business growth areas.
Dips in Apple’s stock have generally been followed by a continued and sustained growth streak. The question I get from investors now is along the lines of how high can it go? Can Apple get to a $2T market cap? I don’t have the answers to these questions, but if the growth areas continue to ramp, then I don’t think Apple stock is anywhere near its peak at the moment.
My take: I also read way too many buy-side notes. And his take-away is mine, too.