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Apple Stock Is Still a Buy Even With $2 Trillion Market Cap in Plain Sight

Why resist the inevitable when you could instead own Apple stock and enjoy the steady returns?

If you’ve been in the investing game for a while, you’ll surely recall the tragic day when Apple (NASDAQ:AAPL) founder Steve Jobs passed away. At that time, some financial pundits speculated that the company would lose its way and that Apple stock would never recover.

Apple Stock Is Still a Buy Even With $2 Trillion Market Cap in Plain Sight
Source: Mykola Churpita / Shutterstock.com

Those commentators would probably prefer that we ignore their egregiously off-base predictions. Under Apple CEO Tim Cook’s watch, the company is thriving and even an event as drastic as the spread of the novel coronavirus couldn’t slow Apple stock down for very long.

Indeed, the company has achieved a number of milestones along the way to the present time. It was a real headline grabber in August 2018 when Apple achieved a $1 trillion market capitalization. Today, that’s old news and a new milestone is in sight. The company’s not there quite yet, but there’s no point in denying the powerful momentum of this company and its stock.

A Proven Winner

There’s no denying that the Covid-19 crisis really threw Apple stockholders for a loop. The share-price descent from $327 to $224 was swift and, for the unprepared, a bit worrisome.

That low point provided a heck of a bargain, but it’s easy to say that in hindsight. More important is what to do now that the share price is near the previous high point.

First and foremost, we need to learn a lesson if we haven’t already learned it: Apple is a market leader and, until there’s a reason to believe otherwise, a company that can’t be held back for long. If you have a long enough time horizon, then just about any dip can and ought to be bought in Apple stock.

Naturally, the critics will insist on trying to poke holes in Apple. For instance, they will point out that the subscription streaming service Apple TV+ got off to a slow start.

Granted, Apple TV+ isn’t a powerhouse among streaming service providers yet. However, it has been reported that Apple plans to spend up to $6 billion to build out the content for Apple TV+. Plus, Apple’s library of content has already expanded from eight titles to 28.

The Road to $2 Trillion

Currently at a $1.4 trillion market cap, Apple stock remains a major force not only in the technology sector, but in the entire American stock market. But for Evercore analyst Amit Daryanani, there’s much more upside to come.

Daryanani predicts that Apple’s market cap will reach a whopping $2 trillion in just a few years. He broke down the math behind this prediction, and it makes sense as long as there’s no seismic catastrophe or black-swan type of event.

For fiscal-year 2024, Daryanani expects Apple to achieve earnings per share of $23. According to his calculations, Apple stock could trade at 24 times that earnings-per-share figure of $23, which would result in roughly $550 per share.

Next, Daryanani expects Apple to repurchase around 1 billion shares between now and 2024. That’s not unreasonable to assume as Apple has a penchant for stock-share buybacks.

If we follow this line of reasoning, this would put the share count of Apple stock at around 3.6 billion by fiscal-year 2024. So, now we can put all of the pieces of the puzzle together.

3.6 billion shares of Apple stock, multiplied by $550 per share, would increase the market cap to nearly $2 trillion. Sure, a number of assumptions have been made in arriving at that dollar amount. But there’s nothing outlandish about Daryanani’s outlook and $2 trillion does at least seem inevitable, even if 2024 isn’t the exact year it’s achieved.

The Final Word on Apple Stock

Even if you don’t see $2 trillion happening by 2024, the direction is still very likely to the upside for Apple stock. And you never know, as the $2 trillion milestone might even be reached sooner than that. Either way, it will be enjoyable to witness the event as Apple makes history once again.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, https://investorplace.com/2020/06/apple-stock-is-still-a-buy-even-with-2-trillion-market-cap-in-plain-sight/.

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