As Apple (AAPL:NDQ) closes in on its next product launch event in September, when a new iPhone is expected to be unveiled, the tech giant is also racing towards another unparalleled business milestone: becoming the first trillion dollar company.
For the record, that’s a one followed by 12 zeros, or...
$1,000,000,000,000.
It’s a big number.
Apple has already enjoyed a banner year on Wall Street. At a record $162.91 per share, the stock has jumped nearly 60% in the last 12 months. That rally has swollen the company’s market valuation to a fraction more than $815bn.
That leaves the company about 23% shy of the target.
EXPERTS ARE CONFIDENT
Analysts at investment bank RBC firmly believe Apple will hit this staggering milestone within 12 to 18 months. Yet it is not hard to see a trillion dollar Apple long before then. The stock has rallied 15% since early July, and more than 40% in 2017 so far.
Geopolitics could play its part, according to Jordan Hiscott, chief trader at Ayondo Markets.
‘The potential for conflict has never been closer following the latest ICBM missile test from the North Korean regime, with the firing of a missile over Japan certainly raising the already-high stakes.’
‘As you would expect, global indices and risk assets in general felt the force of the trepidation related to this, all moving lower in dramatic fashion,’ the trader says as investors chased equity investments they feel they can trust.
HIGH TECH COMPANY ON A LOW TECH RATING
But if you think Apple must be trading on an eye-popping, triple-digit price to earnings (PE) multiple you’d be wrong. The forward PE stands at just 15.15, according to data from Reuters Eikon. The shares also carry a 1.6% prospective income yield.
A reasonable rating plus dividends may well provide the catalyst for another move higher for the shares, especially given Apple’s enormous $261.5bn net cash pile. Yet this is likely to play second fiddle to other factors, if a further re-rating higher is to come.
‘For me, it’s the imminent launch of the iPhone 8, due for September 12,’ says Ayondo’s Hiscott. ‘With the iPhone being Apple’s flagship product this could be a defining moment for the company.’
Apple sold about 41m of its trademark iPhones to 30 June, about in-line with analyst projections. But that was short of the combined near 130m iPhones it moved in the previous two quarters, suggesting that there could be decent pent-up demand for the latest device.
