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Apple Inc. (Nasdaq: AAPL) just reported the biggest quarterly profit ever for a public company – $18 billion in net income over the last three months of 2014. And CEO Tim Cook says his company made a "staggering" number of iPhone sales during that time – 74.5 million.
And already a lot of folks in the media and on Wall Street are asking this question: What's next?
For once, that's exactly the right question to ask.
After all, stocks are "discounting" mechanisms, meaning their valuations are based on expectations of the future.
But instead of looking at the picture clearly, the media is making Apple shareholders worry that smartphones have reached their peak – and Wall Street seems to think the company has become too dependent on iPhone sales.
First of all, neither of those worries is based in fact. Second, beyond iPhones, Apple has in place several catalysts for continued strong growth.
Today, I'm going to show you the three reasons why Apple is still on target.
And why you'll keep getting rich…
Best Quarter Ever Is Just a Start
Not to boast – well maybe just a little – but I have been a consistent bull on Apple for some time now.
After all, I made that $1,000 share-price prediction 15 months ago, back when most analysts were doubtful of CEO Cook's potential and bearish on his company.
But these incredible quarterly earnings prove what I've been saying all along – this is a tremendously large company that still has a lot of upside.
In fiscal 2015's first quarter, Apple's earnings per share (EPS) soared some 48% to $3.06, a record amount. And those 74.4 million iPhones were a 46% increase from the year-ago period.
At this point, Apple's smartphones could soon gain global dominance over Samsung Electronics Co. Ltd. (OTCMKTS: SSNLF). That's significant because the South Korean company became the world leader in smartphone sales back in 2011.
But in the quarter ended Dec. 27, Samsung sold roughly the same number of phones as Apple. All of which has many on Wall Street suggesting that Apple is now too dependent on iPhone sales.
Yes, smartphones accounted for nearly 70% of revenue. But remember Rule No. 2 of my five-part tech investing system, which says to "Separate the signal from the noise."
All that "concern" from the media and Wall Street is "noise."
Here's the "signal": Apple will continue to grow beyond iPhone sales thanks to catalysts in at least three sectors.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.