Apple Inc. (AAPL) Will Continue Its Recent Tear: Gene Munster

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Apple stock kept soaring higher and higher last month and setting new record highs, but it has since pulled back a bit. Well-known analyst and Apple bull Gene Munster of Piper Jaffray expects Apple shares to keep rising, pushing the company’s market capitalization higher and higher.

World’s most valuable company to get even more valuable

Apple’s market cap is now a “mere” $742.5 billion or so, although it has slipped from its high of almost $757 billion. Munster said in a recent interview with Benzinga’s #PreMarket Prep that he sees it moving higher for two main reasons, reports Louis Bedigian of Benzinga.

First, Munster thinks Apple’s addressable market may be larger than most investors think. He pointed out that, historically, Apple’s market share when it releases a new product climbs and then “declines right away.” He added that because the company now has iPhones with larger screen sizes that compete with the phablets offered by competitors, which have become more popular, it may be able to hold onto more of its market share.

Apple’s market share climbs by the millions

Munster estimates that for every 1% in market share that Apple gains, it adds 15 million iPhones to its installed base. Currently the iPhone maker has about 20% of the market. He also thinks that investors who believe the larger iPhone 6 and iPhone 6 Plus are more competitive because they have bigger screens, they “should be optimistic about market share gains.”

The Piper Jaffray analyst also mentioned today’s event, saying that the first phase for Apple is growing the iPhone installed base, and the second “involves a cornucopia of other products.” The company is expected to reveal more details, including a release day and more pricing details, at its Spring Forward event today.

Munster also thinks there will be some kind of product that serves as a replacement for the phone. Additionally, he sees further catalysts in the rumored self-driving car Apple was said to be working on and the rumored Apple TV set.

Apple may hurt Google Search

The analyst also weighed in on recent reports that Apple may dump Google as the default search engine for its web browser Safari. If Apple does replace Google, then Google could lose 3% to 5% of its revenue this year.

However, he thinks Google will eventually gain the lost market share back. He noted similar circumstances in other markets when a major search engine was replaced.

“People will switch initially because they’re going to be forced to, but then they’ll quickly switch the browser back to Google and Google will gain that share back,” he said.

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