apple shares

Apple Inc. (NASDAQ:AAPL) shares were down on Wednesday after DoubleLine Capital CEO Jeffrey Gundlach indicated that he now has a short position in the technology firm. The shares were down as low as $541.04 per share in trading, however the shares did recover late in the session after legendary shorter David Einhorn responded to Gundlach’s comments, defending Apple. The stock closed the day at $546.08.

“I just wonder how many people will queue up around the block for an iPad 87,” said Gundlach, suggesting that Apple’s proponents were overly optimistic on future growth opportunities.

Einhorn counted, explaining that Apple is little understood despite its popularity. He said in a Ira Sohn address that Apple, “monetizes value through the repeated sales of high-margin software.” He went on to suggest that Apple could reach a market capitalization of $1 trillion.

While certainly bullish, Einhorn isn’t the only investor suggesting that Apple could reach such heights. Mario Gabelli, head of GAMCO Investors, is also extremely bullish on the future of Apple, despite not owning any of the firm. Gabelli suggested in an April 25th interview on CNBC that if Apple maintains a 15% growth rate for the next five years, a trillion dollar market capitalization is not out of the picture. While he steps back from the prediction, indicating that is a possibility and not a forecast, he believes the product line that Apple has in place uniquely positions itself for long-term success.

In addition to Einhorn and Gabelli, Third Point LLC’s Dan Loeb indicated in his 2012 Shareholder letter that he too is remaining bullish on Apple, suggesting that current cash flow multiples paint an extremely favorable forward looking picture of the firm. Opportunities in television and new 4G technologies will boost the firm’s value over the next couple of years.