Can anything stop tech juggernaut Apple Inc. (NASDAQ:AAPL)? With AAPL stock now trading at all-time highs, driven by its 27% one-month rise, investors want to know whether it’s too late to bite.
Apple stock, which already ranks as the best-performer in the Dow Jones Industrial Average, closed Monday at $139.34.
AAPL shares have soared nearly 21% year-to-date, crushing not only all the major indexes, but also the performances of FANG stocks Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL).
All told, the Cupertino-based tech giant, which has been on a winning streak over the last year, has made investors tons of money with more than 35% returns. And with some patience, there’s still at least 15% gains to be had as AAPL stock is poised to reach $160 in the next 12 to 18 months. How’s it going to get there?
Apple Stock’s Strength
Aside from the recent endorsement Apple received from billionaire investor Warren Buffett, who revealed on CNBC last week that his Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) conglomerate more than doubled its stake in Apple to 133 million shares worth around $17 billion. AAPL has its iPhone 8 and a host of other tailwinds to propel the revenue higher. Rumors suggest that the tenth-anniversary iPhone, which will feature a new OLED display, could sell for more than $1,000 per device.
As such, given that Apple, which sold more than 78 million phones in 2016’s holiday quarter, has surpassed Samsung Electronics (OTCMKTS:SSNLF) in market share, according to data just released research firm Gartner, the company should have no problems selling the new iPhones and generating huge profits. What’s more, Apple has also become more than just an iPhone shop.
In its fiscal first quarter, Apple’s Services revenue, which includes Apple Music, the App Store, iCloud, Apple Care and Apple Pay, grew 17.5% year-over-year to $7.17 billion, topping forecasts of $6.91 billion. With Services quickly becoming the company’s second-largest business segment, Apple appears better balanced going forward. And all of this makes AAPL stock less risky, despite its all-time high status.
Bottom Line for AAPL Stock
When factoring Apple’s massive cash stockpile of more than $250 billion, AAPL stock — despite trading at all-time highs — still looks like a bargain. Based on fiscal 2017 consensus estimates of $8.94 per share, Apple stock is priced at just 15.5x earnings-per-share, which is about four points below the S&P 500 index. Assuming AAPL was priced on par with the rest of the market, the shares would trade today at around $170. In other words, even the a $160 target looks too conservative.
As of this writing, Richard Saintvilus did not hold a position in any of the aforementioned securities.
