Apple stock (AAPL) – Get Apple Inc. Report has been ripping higher lately. As I write this sentence, shares have just breached $169 for the first time in over a month, during what is likely to be the sixth straight trading session of sizable gains for the stock.
As AAPL continues to climb, the Cupertino company’s equity approaches the $3 trillion valuation once again — maybe a shocker to some, given so much geopolitical disruption and economic risks that still linger.
Figure 1: Apple Stock Could Reach $3 Trillion Market Cap Soon
Unsplash
(Read more from the Apple Maven: Apple Stock: Bright Green Light To Buy, Says One Analyst)
AAPL could reach $3 trillion soon
As of the end of fiscal Q1, Apple had 16.5 billion diluted shares outstanding. In about a week, assuming the average pace of share retirement, this number is likely to dip to $16.4 billion.
Because AAPL trades at roughly $169 per share, the current market cap is about $2.77 billion. Therefore, to reach $3 trillion in value, Apple stock would need to rise some 8% from here.
Consider that Apple has climbed a whopping 12% in less than 10 days, after the stock reached a 2022 low of $150 on March 14. Project the same bullish momentum forward, and one can imagine a $3 trillion market cap before the end of the current quarter.
The more skeptical investor could draw a different conclusion: can AAPL really climb nearly 10% in the foreseeable future after having spiked as much as it did recently? Shouldn’t one expect a bit of a pullback instead?
Catalysts ahead
If Apple stock is to reach a $3 trillion valuation any time soon (say, in the next several days), the rally is likely to be fueled by macro-level developments.
The most probable bullish spark would be favorable developments in Eastern Europe leading to an overall risk-on stance in the equities market. For example, successful Russia-Ukraine negotiations or a dip in crude oil prices could do the trick.
If we extend the time horizon to a few weeks, then earnings season could be the key catalyst.
Apple is likely to report fiscal Q2 results at the end of April, which is only around five weeks away. On earnings day, anything is possible, and a single-day gain could be enough to send AAPL past $3 trillion once again.
The bar will be set high this time around. For instance, Apple will be facing very tough iPhone revenue comps, as the chart below depicts. For this reason, sales are projected to rise by only 5% YOY, and EPS, by an even more modest 3%.
Figure 2: iPhone revenue growth since F19.
DM Martins Research, data from Apple
But still, Apple’s business seems to be firing on all cylinders, and the Cupertino company can very well impress analysts and investors.
I have recently explained how a combination of high demand for tech devices like the iPhone, increased ASP (average selling prices) and easing of supply chain challenges could be a “cocktail of positive news” for Apple and its investors.
Twitter speaks
Should Apple stock climb another 8%-9% from here, the company’s equity will be valued at $3 trillion once again. How long do you think it will take for AAPL to reach the milestone?
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)
