Apple Inc. (NASDAQ:AAPL) stock is keeping $1 trillion just out of reach for the company’s market capitalization, but more and more analysts are suggesting that 2018 is the year the iPhone maker will finally achieve that milestone. So how much of it is just hype about Apple stock, and how much will actually play out in reality?
Apple stock to $200 in 2018: analyst
If nothing else, Apple stock does have momentum on its side, as it has rallied right alongside other big tech names, but it’s only natural for bulls to find much more to like. According to The Street, Citi analysts see Apple stock heading for $200 in 2018, adding to the almost 50% it has gained this year. As other analysts have pointed out, when Apple stock reaches $200, it will give the company that apparently magical $1 trillion market cap.
He talked up tax reform, services and enterprise sales as three areas he expects the iPhone maker to shine in next year. Services revenue is generally the cream of the crop for any tech company because it usually comes with high margins, and enterprises are often the biggest spenders, both on products and services. Tax reform is likely to benefit many large companies, especially those with piles of cash overseas, like Apple does, although the bill’s final form will depend just how much Apple can benefit, if at all.
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Apple rides on iPhone X
The area of biggest interest for most analysts is the iPhone X, so we’re probably going to see praise being written for it well into 2018. Before the phone was launched, analysts were painting it as the one thing Apple stock needed to recover, although the supply shortages spooked a few.
Then the reports of other problems started to arrive, like the rather unenthusiastic review from Consumer Reports and other reviewers. Other issues that see to have hindered Apple late this year include the continuing problems with iOS 11.2 and the company’s admission that it had launched the LTE-equipped Apple Watch Series 3 with issues. Suddenly, Apple stock wasn’t looking so good; some were starting to see a has-been without much of a future.
iPhone X outpacing iPhone 8, 8 Plus
However, the tides are turning yet again for Apple, this time on a report that iPhone X adoption could be outpacing that of the iPhone 8 and 8 Plus. According to Business Insider, analytics data from Mixpanel suggests that late last month, the iPhone X was selling better than the iPhone 8 and 8 Plus. Apple’s most expensive model to date was showing a 4.76% adoption rate, versus 3.59% for the iPhone 8 Plus and 2.78% for the iPhone 8. The data is based on app use from the three different iPhone models.
Investors will likely be pleased to hear that the most expensive model has finally made it to the top of the heap, although Mixpanel’s data also indicates that the vast majority of iPhone users have a model that’s older than the iPhone 7. This would support the argument that the installed base is ripe for the picking because of how old it’s getting, but Wall Street will be watching Apple’s next earnings report to see just how many iPhone X units were handed out as gifts this year. It could be a good indication of whether fans are being kept away by the price tag or not, but until then, we’ll just have to wait.
Apple stock ticked higher by as much as 0.63% to $172.78 in intraday trading on Wednesday.