How Big Will Apple Stock Get? It’s becoming an increasingly harsh economic environment in which to do business right now. Interest rates are rising, mortgages are going up, and the cost of living crisis shows no sign of receding anytime soon.
While this is bad for the broader market as a whole, it’s especially damaging for companies such as Apple. Indeed, any business that manufactures high-end, premium-priced goods is always reliant on customers having the means to expend cash on the latest and most up-to-date products.
However, with the headwinds that today’s consumers have to deal with in their own lives, that assumption is something that can no longer be taken for granted.
It was against this pessimistic background that the Cupertino-based technology company recently showcased its iPhone 14 launch event. Surprisingly, the general reaction was fairly muted, with some industry insiders describing the day as a bit of a disappointment. Moreover, since Apple had already lost 17 percent of its value this year, it was worrying that its share price barely moved in response to the big unveiling.
But as a company, Apple is still a major draw for investors. The organization has a long history of strong financial performance, and its products are hugely popular with consumers. Apple also has a very loyal customer base, which is one of the key reasons why its stock price has been so resilient in recent years.
On top of that, shareholders appear confident that the firm will continue to perform well into the future, given that short interest in the company is so low at only 0.70 percent.
Which naturally poses the question: Just how high could Apple stock eventually go?
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New Opportunities For Growth
Apple might be most famous for its range of popular home computers and stylish smartphones, but the business has other pokers in the fire when it comes to exploiting new avenues of growth.
For instance, the rise of the IoT – or Internet-of-Things – means that you’re likely to see an increase in the demand for Apple’s HomeKit platform, which allows users to control various smart devices around their homes using their iPhone or iPad.
Although it still has a long way to go before becoming a commercial reality, Apple’s self-driving electric car also looks promising. Obviously, a self-driving car would be a new type of product for the company – and one that comes with plenty of barriers to overcome. It would need to design a prototype that seamlessly integrates with its existing ecosystem, although the firm has achieved this feat many times before.
Nonetheless, Apple has yet to perfect the technology, and it’s sure to face significant regulatory hurdles on the way. But while it’s not the only player in the autonomous vehicle space, it is one of the most well-funded and has assembled a strong team of experts. If it can navigate these challenges, the Apple car could upend the automotive industry, revolutionize the transportation sector, and boost the firm’s bottom line while it’s at it.
AAPL’s Supply Chain Issues Could Be A Thing Of The Past
Like almost every other manufacturing venture, Apple has had to deal with a series of debilitating supply chain disruptions since the onset of the COVID-19 crisis in 2020.
In fact, even before the coronavirus outbreak, Apple was already facing challenges to its logistics operation. The firm was struggling to meet iPhone demand, with factory closures, material shortages, and shipping delays impacting its ability to do business.
Furthermore, the pandemic hit Apple’s Chinese suppliers hard, and, while the company could source some components from other countries, the global nature of the supply chain meant that setbacks were difficult to avoid.
However, Apple is not alone in facing these challenges; other companies that rely on Chinese manufacturing, such as Nintendo and Sony, have also been affected. But Apple is particularly vulnerable because of the high price of its products and the large number of devices it sells each year.
And yet, the company has responded aggressively to these challenges: it’s diversified its supply chain, invested in new facilities, and worked closely with suppliers to ensure that production could meet demand. These actions ensured that Apple was able to weather the worst of the storm and emerge more robust than ever before.
Hopefully, if AAPL finally tames its logistics problem, the company will be in a better position to capitalize on the ambitious product pipeline that it has planned for the future.
Is Apple A Buy At Today’s Prices?
Assessing Apple’s fair value is tricky at the moment. The market is in a downward tailspin, and falling share prices are making some companies appear a lot cheaper than they really are.
But is this the case with Apple? The company is currently trading for around $150.00, which is about 18 percent off its all-time high of $182.86. For comparison, the Nasdaq Composite is down nearly 32 percent in 2022, suggesting that AAPL is holding up pretty well.
However, that could imply two things.
The first would be the bullish thesis, which goes something like this: Apple has, and is, demonstrating its resilience to the forces battering the market, making it the perfect stock to hold just now. It also delivered an earnings beat and a new record revenue haul in the last quarter, with its flagship iPhone product sales exceeding expectations too.
OK, that sounds good – so what’s the problem?
Well, the bears would have you believe a different story: while Apple’s earnings did beat Wall Street predictions, they actually fell 8 percent year-on-year, with sales of its Mac computer also dropping 10 percent as well.
Furthermore, those iPhone sales accounted for 49 percent of Apple’s entire revenue, which, if it were any other company, would look suspiciously like a concentration risk.
So yes, its top line might be up, but if Apple can’t squeeze the same profit out of a bigger pot of money, the business must be failing in some way – and it’s only a matter of time before the company starts to tank.
It stands to reason that both opinions can’t be true, and it’s up to you to decide which is the more accurate analysis.
But how high will Apple stock go?
That depends. In the near term, things could get a lot worse from a macroeconomic point of view, with many commenters believing that the Fed will raise interest rates again to reign in inflation.
With that said, the company’s brand reputation and impressive 33 percent EBITDA margin should be enough to maintain its status as the world’s largest enterprise for a little while longer.
But one thing’s for sure – Apple’s a lot cheaper today than it was a few months ago. And if you think the company can turn its fortunes around, now might be a good time to pick up some shares while the price is so temptingly low.
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