The Apple market value is currently close to $900 billion, and almost all are sure that it will hit the magical figure of $1 trillion sooner or later. The big question is when. Some are expecting it to happen this year, while others believe it could take some months.
When will the Apple market value hit $1 trillion?
Last week, TradingAnalysis.com founder Todd Gordon told CNBC that he believes Apple’s market cap will hit the trillion-dollar mark this year. Gordon talked of a “very strong” uptrend on the company’s stock chart starting in the summer of 2016. Based on Gordon’s analysis, Apple’s stock should hit $200 before the end of the year, helping it to cross the $1 trillion milestone.
“At that point, technically speaking, we would be considered overbought. But for now, we can use that for the upside target [through the end of the year],” Gordon said on CNBC’s Trading Nation last week.
However, today an analyst with GBH Insights said the iPhone maker will be the first $1 trillion company within the next year, according to CNBC. In a note on Thursday, analyst Daniel Ives said that a strong upgrade cycle for the iPhone X and a “renaissance” in China will push the Apple market value to the trillion-dollar mark. Over the next 12 months, Ives expects the stock to trade between $210 and $230.
Ives notes that there are more than 350 million users who are using at least two-year-old iPhone models. The analyst expects a “sizeable portion” of these users to upgrade to the newer models. Further, the analyst says the iPhone X demand trajectory and success will be the deciding factors for Apple “joining the elusive trillion dollar market cap club in 2018.”
“To this point, the first stage of the iPhone X launch is off to a great start in what will be a crucial prove me period for Cook and Apple over the next year,” the analyst says.
Further, the analyst notes that the iPhone X, which starts at $999, will help drive up the average selling price for the iPhone from $643 in fiscal 2017 to $746 in 2018.
It may not happen without China
However, the analyst noted that though Apple has struggled in China lately, so the iPhone X could play a major role in ending that struggle by bringing a “renaissance” in the world’s largest smartphone market. According to GBH Insights estimates, China has about 100 million iPhone users, and about 50% of them could upgrade in the next 12 to 18 months. According to Ives, technological upgrades to the iPhone and the fact that iOS devices are seen as a “high-end fashion statement” will encourage Chinese buyers to upgrade.
Ives is also bullish on Apple’s services segment and sees it as “the biggest area of growth.” Apple’s services business, which reported revenue of $8.5 billion for the September quarter, could hit $50 billion in revenues for the fiscal year ending September 2020, the analyst predicts. Further, Ives expects much of the growth in services to come from “China as the ‘halo effect’ of Apple will fully manifest itself among iPhone users…..”