Remember when Microsoft was left for dead?
For more than a decade after the dot-com bubble, shares of Microsoft languished in the $20 range.
The stock went nowhere, victimized by its prior success and lack of motivation to innovate. It was content to just hold a vice grip monopoly on operating software.
Don't mess with a sleeping giant.
It turns out those betting against Microsoft finding a new product to sell were wrong.
Since replacing its CEO with a more innovative leader interested in exploiting new markets like cloud computing, Microsoft stock has exploded higher.
Shares are up some 450% since 2012.
That massive return was fueled by what was once considered the next monster breakthrough in the world of technology.
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All Microsoft had to do was exploit its leadership and size to profit handsomely. That industry was cloud computing...
Today, many of the same naysayers are betting against Apple stock.
Gone are the days of innovation, they say.
In its place is a staid company that deserves a much lower valuation.
Why the 5G Movement Is Such a Huge Catalyst for Apple Stock
At the moment, Apple phones are not built for the rollout of 5G.
This may or may not have been an intentional move on the part of Apple management.
If 5G is as big a deal as most expect, Apple users will quickly clamor for the capability. After all, more than $1.3 trillion is expected to be spent globally on the rollout of 5G technology...
What's the biggest thing dogging Apple stock today?
Sales of the all-important iPhone have hit the flat line.
The upgrade cycle of buying new phones has been extended.
However, nothing will change that quicker than demand for critical technology.
Given the importance of 5G and the interconnectivity of all things, investors may have found their catalyst for consumers buying new phones.
That catalyst is needed to propel the stock out of its current rut. Make no mistake, Apple is still up more than 7% in the last 12 months, compared to 4% for the S&P 500. But for Apple investors used to big gains, this still feels like a "rut."
But once Apple fully embraces 5G, the stock price could climb much higher...
What 5G Could Mean for the Apple Stock Price
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Still, Apple trades for just 15 times last year's earnings at its current price.
One reason for that low multiple is the current Wall Street expectation of Apple earnings declining this year from 2018 levels.
In the narrow scope of that outlook, the value of Apple shares makes sense.
The opportunity for investors in Apple today is that 5G is a 2020 or 2021 event for Apple.
It will take time for the company to equip phones with 5G technology.
The manufacturing cycle at Apple, once the decision has been made to adopt 5G, will extend far past 2019.
Wall Street does expect Apple to make $12.76 per share in 2020.
That number does not include a boost from sales of 5G-capable phones.
Let's assume a rollout of 5G products arrives in 2021.
The extra boost gained in demand for the new technology should be enough to justify giving Apple a multiple of earnings above 20.
At a price/earnings multiple of 20, the value of Apple shares is at $255.
Assuming that 5G sales are worth $1 per share in earnings (not an unreasonable assumption given the $1.3 trillion 5G opportunity), the price of Apple shares using a 20 multiple is close to $300 per share.
If those numbers are close to reality, investors in Apple shares today would be looking at an approximate 50% gain from today's prices.
Not bad for owning a stock with a near trillion-dollar market cap.
Largesse does not necessarily mean returns need to be muted.
Not when something as large as 5G is looming.
Investors missed the boat on Microsoft, believing the company was doomed to a future without innovation.
Don't make the same mistake on Apple today.
5G Is Coming: The Breakthrough of the Century Could Rest on This $6 Stock
CNBC reports that this opportunity is worth $12.3 trillion... and it's gearing up to make an appearance all over America.
In fact, some of these devices are showing up right in your neighborhood - and I'm willing to bet you didn't even notice.
Our Silicon Valley insider mapped out all the details in this report.