With a market cap of $2.38 trillion, Apple has achieved what once seemed impossible to founders Steve Jobs and Steve Wozniak back in 1976. They started with nothing – in Jobs’ parents’ garage, no less – and they built what is now the most valuable company in the world.
When Apple went public in 1980, shares were priced at $22 each. In a single day of trading, the stock rose 30 percent, and soon the company was valued at $1 billion. Today, share prices are more than $142, but that’s not the whole story. Apple shares didn’t gain a mere 650 percent. Since inception, their value has grown a shocking 129,400 percent.
How is that possible? And how high can Apple stock go?
What Is The Highest Apple Stock Has Ever Been?
An investor who bought one share of Apple stock at $22 in 1980 would own 224 shares today. That is possible because in Apple’s 31-year history, there have been five stock splits, as follows:
- June 16, 1987 – 2-for-1
- June 21, 2000 – 2-for-1
- February 28, 2005 – 2-for-1
- June 9, 2014 – 7-for-1
- August 28, 2020 – 4-for-1
To put it another way, without any of these splits, that original share would be worth more than $20,000 today.
If you review the history of Apple’s share prices, the highest Apple stock has ever been is $150 on a post-split basis. Making sense of that seemingly inaccurate statement requires adjusting backward to reflect the stock splits.
If one share at $22 in 1980 is equivalent to 224 shares at $140 today, then it is only possible to accurately assess Apple’s growth by considering that once splits are calculated in, a 1980 share of Apple is valued at less than a dime.
Is Apple Stock Overvalued?
The answer to the big question – is Apple stock overvalued – depends on who you ask. While most analysts and industry experts consider Apple a bargain at any price, there is a vocal minority that insists Apple stock is overvalued and due for a correction.
For example, a respected Goldman Sachs analyst suggests that Apple stock could drop as much as 30 percent of its current value. This evaluation is based on an assessment of the new sources of revenue that have given Apple a boost in recent quarters.
The company has invested heavily in Apple TV+, Apple Arcade, and similar services. These apps are currently enjoying widespread use, but that may be temporary. Apple gave users a one-year free trial with the purchase of any new device. It is possible, perhaps even likely, that subscriptions will fall off a cliff once users are required to pay.
However, most analysts agree that revenue from these services is not critical to Apple’s success – at least not right now. If they do fail to live up to their promise, the impact on bottom-line results will be negligible for the moment. In short, Apple stock is not overvalued at current prices.
Apple Price Targets (Wall Street Analysts)
Analysts are overwhelmingly positive about Apple’s prospects over the next 12 months. That’s due, in part, to better-than-expected results for the quarter ending March 31, 2021.
Revenue increased by 54 percent year over year to total $89.6 billion, which exceeded analysts’ predictions of roughly $77.4 billion. Earnings per share exceeded expectations as well, coming in at $1.40 rather than the projected $0.99 per share.
Of the 40 analysts who provided forecasts for Apple in July, most say now is the time to buy. A small number suggests that Apple is currently a hold, and just two suggest investors should sell. The median 12-month target price is $160 per share. The highest forecast is $185 per share, and the lowest is $90 per share. Should Apple hit the median estimate, investors who buy today will see growth of more than 12 percent.
What Can Derail Apple Stock?
It’s unlikely that anything can stop Apple stock altogether, but there are two risks that could slow the company down.
First, there is an ongoing regulatory risk as governments around the world take aim at big tech. For the time being, Facebook and Amazon are the primary targets, but that could change in an instant. Certain types of tech-focused antitrust legislation may have a negative impact on Apple if they are implemented.
Second, Apple is dependent on suppliers for the silicon chips that power each and every device it produces.
However, the current demand for chips is much higher than the supply. After all, every other manufacturer of computers and smart devices needs the very same chips. This shortage has the potential to slow Apple’s ability to deliver the number of devices it has forecasted. Again, though, if the shortage does impact Apple, it will only slow Apple down – it won’t stop Apple stock altogether.
Is Apple a High Risk Stock?
Apple has all of the risks that come along with being part of the tech industry, but very few would call Apple a high-risk stock. While other tech companies face heavy competition, changes in consumer behavior, and an inability to adapt, Apple has cemented its advantage on all three fronts.
Certainly, there are other mobile device manufacturers, but Apple isn’t at risk of losing market share. In fact, its customers tend to be passionate about the products to the point that they don’t even consider other brands when upgrading.
Apple stock is a bit pricey, and some suggest it is overvalued, but that’s really a short-term concern. While the tech industry does experience its share of ups and downs and Apple stock goes along for the ride, realistically, Apple is not in any real danger of losing significant value long-term. Share prices may fluctuate, but it is likelier than not that over time, Apple stock will continue to reach new heights.
How High Can Apple Stock Go?
Those who are optimistic about Apple’s prospects are very, very optimistic. The company is just beginning to manufacture and deliver devices capable of 5G technology, which could be the start of a so-called “iPhone supercycle” that will last at least two years.
The same sort of supercycle occurred in 2014 when Apple introduced a larger screen in the iPhone 6 series. There was a rush to upgrade, and industry experts expect the consumers to demonstrate the same behavior with this change.
What does that mean for Apple? Profits. Huge profits. Bottom like figures that could eclipse anything in the company’s history thus far. And that doesn’t take into consideration the impact of other projects already in the works, such as Augmented Reality (AR) devices and electric self-driving cars.
Any estimate of how high can Apple stock go is just a guess, as the company continues to disrupt entire industries year after year. It has a long tradition of innovation and the ability to invest in cutting-edge research and development, which means this is one company that may continue to shatter records for decades to come.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.