Don’t get me wrong. Nobody loves a rallying stock more than I do, especially when it’s rallying for all the right reasons. When the rally itself becomes bigger news than the stock or company, though, I start to get more than a little nervous.

Well, my Spidey-sense is tingling again with Apple (NASDAQ:AAPL). Something just isn’t right.

There’s nothing wrong with the company, per se; it’s a fine company. Any company that can generate $128 billion in revenue in any 12-month period has to be fine. It’s so fine, in fact, it’s now the biggest company in the world with its $500 billion-plus market cap. It’s even bigger then Poland or Saudi Arabia — if those countries were revenue-bearing companies — according to now-controversial headlines posted last week.

There’s nothing wrong with earnings or earnings growth, either. The company socked away a net profit of $33 billion over the past four quarters, translating into a palatable P/E ratio of 15.5, and I’m sure the bottom line will only continue to grow as Apple continues to unveil the coolest tech gadgets out there.

Click to Enlarge So what’s my beef with Apple? Apple Mania has driven this stock up by 44% since mid-December, making it the most technically overbought AAPL has ever been in its entire history … ever! The nearby chart offers a little perspective.

That’s not to say Apple can’t justify the current price of $545 per share. It can. The trailing P/E of 15.5 is actually below the norm for the consumer technology industry. It’s simply my reminder that, whether it’s reasonable or not, the market rarely never lets a stock get this far ahead of itself without forcing it to pay the price.

At the Heart of the Matter

But if it’s so rare, how did Apple get in this shape in the first place? Great question. The short and long answer is, the media hyped it up, and the investing public ate it up. Nothing sells or feels better than a success story.

One of my long-standing complaints with the financial media — TV mostly — has been the fact that people actually pay attention to it, and frequently respond to it. Just because someone is on television doesn’t make them right, however. Check out some of the recent web and TV-to-web headlines about Apple’s projected stock price, most of which are 12-month targets:

• 1/9: Goldman Sachs (NYSE:GS) ups its AAPL target from $520 to $550 when the stock is at $421.
• 1/17: Jefferies (NYSE:JEF) raises its target from $500 to $550 when AAPL is worth $425.
• 1/25: Deutsche Bank (NYSE:DB) boosts its Apple price target to $600 while it’s at $446.
• 1/25: Piper Jaffray analyst Gene Munster sets a price target $670, the same day as Deutsche’s pumped-up forecast.
• 2/9: Canaccord Genuity raises its target from $650 to $665 with Apple at $493.
• 2/17: Oppenheimer pushes AAPL share price projection from $510 to $570; shares are at $502 that day.
• 2/24: JPMorgan (NYSE:JPM) ups its price target to $665 vs. the stock’s price of $522.
• 2/27: BMO Capital raises its Apple price target from $545 to $590 with shares trading at $526.
• 2/29: Sterne Agee lifts price target from $550 to $620 vs. a share price of $542.
• 3/1: Steve Wozniak (Apple’s co-founder) thinks shares could reach $1,000, when AAPL is trading at $545.

You see where this is going? There are two things going on here: (1) Apple never has been allowed to reach its average price target before the target was raised, and (2) the raised targets are now coming at a fast and furious pace. Investors are noticing. Thing is, they’re noticing the raised targets more than they are noticing the company — the primary fuel for the price rally is the hype from the never-ending string of higher targets.

One has to wonder if there’s even something of a machismo contest going on here among analysts. Which one can hold the carrot out the furthest?

And though it’s very pronounced now, it’s not just been a phenomenon we’ve seen since January. AAPL hasn’t actually hit a 12-month target price since 2009, and that only happened because analysts were too slow to update their targets when things started to turn around early that year.

Bottom Line

The point is, the optimism — and certainty — on Apple has now reached scary proportions. It’s a great company, but when the bullish consensus is nearly 100% like it is now, that means most all the buyers are in a position and few are actually left to step in and bid it up even further. It’s scary.

Don’t take my word for it, either. Check out four of my favorite Warren Buffett quotes and ask yourself how close to home they hit with Apple at this time:

• Be fearful when others are greedy and be greedy only when others are fearful.
• Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.
• The future is never clear, and you pay a very high price in the stock market for a cheery consensus.
• Investors should remember that excitement and expenses are their enemies.

Excitement, greed (fear of missing out), consensus? Yeah, they all apply. Value matters, and Apple has it to be sure. But when the world’s best investor has warned of the conditions surrounding AAPL now, I’m inclined to listen.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.