During intra-day trading on the first trading session of 2022 (Monday), the market cap of iconic iPhone maker Apple Inc (Nasdaq: AAPL) reached $3 trillion before closing at $2.986 trillion. The tech behemoth achieved the milestone when its share price raced past $182.86. The shares of Apple had gained 34% last year. On Tuesday, the stock fell 1.27% o4 $2.31 to close at 179.70 as a result of profit-booking by long-term investors.
The accomplishment is primarily ceremonial, but it reveals that investors continue to have an optimistic view of Apple stock and its capacity to rise. Apple’s market capitalization has surged by 300% in less than four years, to $3 trillion. Analysts believe there is still ample space for further appreciation.
The latest fourth-quarter results of Apple reflect solid yearly growth across all the product segments, with sales rising 29% on a y-o-y basis. Although iPhone remains the major sales generator, the company’s services division posted a growth of 25.6% year-on-year and generated over $18 billion in revenue during the same period.
Based on the above figures, last month, Morgan Stanley’s Katy Huberty upwardly revised the company’s share price target to $200, from $164. The analyst also maintained the ‘overweight’ rating on the stock, noting that upcoming gadgets such as virtual reality (VR) and augmented reality (AR) headgear haven’t yet been factored into the price forecast.
Huberty also believes that revenue generated by the App Store of Apple will surpass Morgan Stanley’s predictions for the December quarter, and that Apple would sell 83 million handsets in the same period, reflecting a comfortable consensus beat by 3 million.
According to analyst Ming-Chi Kuo of TFI Asset Management, Apple recorded sales of 27 million units of its latest AirPods version during the Christmas season, translating into an annual growth of ~20% for the company’s wearables division during the December quarter.
Another prominent analyst, Daniel Ives of Wedbush, has pointed out that the $3 trillion milestone is a pivotal event, but there is still space for growth. Notably, Ives has estimated the value of Apple’s services division to be $1.5 trillion.
Due to Apple’s robust balance sheet and copious cash flow, which it utilizes for stock repurchases, developing and improving the quality of products, and rewarding shareholders via dividends, investors regarded Apple as a safe haven asset amid recent market volatility.
Notably, on August 2, 2018, Apple turned out to be the first publicly listed business in the United States to reach a $1 trillion market valuation. In 24 months, i.e., on August 19, 2020, the company’s market cap reached $2 trillion.
The positive news is expected to keep the share price range-bound with a slight bullish bias.
Technically, the stock is rising after breaking above the ascending triangle, as shown in the image below. The stock is also trading above its 50-day moving average while the MACD indicator is rising in the positive zone. Therefore, we are anticipating the stock to remain in an uptrend in the short term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
