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Of all the Apple stock price predictions out there, this may be the boldest: AAPL shares will reach $200 within 24 months.
And that bold call belongs to a seasoned market analyst with 33 years of experience - Money Morning Chief Investment Strategist Keith Fitz-Gerald.
He wasn't shy about it, either. He made the call on the FOX Business program "Varney & Co." earlier this month, startling host Stuart Varney.
That's why the current consensus one-year target price on AAPL stock is just $142.13, according to Yahoo! Finance. And it's risen considerably. Just 12 months ago, it was $85. Many analysts have had a hard time keeping up with Apple stock, which was trading today (Monday) at $131.52.
The current consensus target is just short of the $1,000 a share equivalent had Apple not done a 7-to-1 stock split last June. The exact price needed is $142.86. The Fitz-Gerald AAPL stock price prediction of $200 is the equivalent of $1,400 pre-split.
And by the way, AAPL stock at $200 a share blows past another big milestone - a market cap of $1 trillion. That will happen when Apple stock reaches $171.82. At $200, Apple's valuation would be $1.164 trillion.
That's bigger than the combined market caps of the next three largest companies - Google Inc. (Nasdaq: GOOG, GOOGL), Microsoft Corp. (Nasdaq: MSFT), and PetroChina Co. Ltd. (NYSE: PTR).
Clearly, Fitz-Gerald's Apple stock price predictions are exceptionally daring.
But just why is he so bullish on Apple?
Apple Stock Price Predictions That Hinge on the Apple Watch
It starts with the Apple Watch.
Now, that may seem odd, given that the Watch only went on sale last week and the reviews have not all been favorable. But Fitz-Gerald sees things differently...
If the Chinese do down the US, they will go down, too as the US is their biggest customer! What sense is this???
WHY APPLE STOCK MAY DISAPPOINT MANY
I see issues with Apple, principally that 55% of their revenue still comes from 1 product: the I-Phone 6. Currently a hit in China, it now has become 27% of their mobile phone market. China is also 20% of their revenue, and growing. While I share Keith's views on China's growth- long term, the intermediate term is far less certain. This is especially true as far as it concerns Apple.
The I-Watch is going to take longer than a year to show that it can become a major contributor to Apple's bottom line and top line. It may or may not prove to be the "must have" that everyone is currently betting on. As far as Apple Ecosystem, that depends on how it further evolves and its future functionalities. All remain unknowns.
So, for now, overall market (negative) sentiment is keeping a lid on Apple stock to below $134. For Apple to break-out and stay above its current 52-week high, it will need the tailwind of a bull market, especially in the tech. space (sector) it occupies. Right now, 23% increase in recent quarterly earnings is not enough to bring-in more buyers or entice them to bid the price up much more. Neither was a very modest dividend increase and stock buyback program ( funded by borrowing overseas).
Financial engineering is slowly replacing the spark of innovation that once was Steve Jobs. The Bull Market is getting a bit old. Most importantly, more FED stimulus is in order for U.S. Markets. Any signal of either QE-4 or the tacit admission that an interest rate increase is no longer in the cards given the "macroprudentials" ( whatever that is ). The FED is an indicator, not the key. Investor sentiment is key, not fundamentals.
BLOOD MOONS AND YOUR APPLE STOCK
All Apple Stock has to do is grow by about 7.6% per year for three more years to have a market cap of $ 1 Trillion dollars. Despite the "ring" to it, a trillion dollar anything (annual Federal deficit ), this number is not magical. Apple may indeed turn out to be the first listed company to hit this benchmark, but it certainly won't be the only one by any measure.
We have devalued the currency in the past five years and will continue to do so. So, the dollar is definitely not the same value or at least does not represent the same purchasing power. In addition, capital gains taxes probably will increase in a few more years, so investors may net less $ than they hope for.
For all this to work out as planned, the economy and the stock market must continue upward with no significant setbacks other than tiny, occasional corrections. Another words, status quo going forward with no recessions, no major changes in monetary policy (rate increases), and plenty of "liquidity".
I am unwilling to bet the farm on all these factors lining-up perfectly. In addition, we have another "Blood Moon" this coming Oct. ( The last of 4 Blood Moons or lunar eclipses in the past two years). They don't call them "Blood" Moons for nothing either.
Hi there
I don't know much about buying and selling stocks but want to buy some stocks. I can invest up to $10000-$20000. Many people are talking about buying Apple stock. Do you think I would be OK if I buy $20000 worth of Apple stock ? I would appreciate your honest feedback. Thanks
I dont know much either, but think you should diversify a little. I think Microsoft is still a good buy, as well as Apple, but I've made more money in the past three months on Bluebird Bio than any other stock I own. I have also more than doubled my money in the past four years on VFC.