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· Apple needs to rise around 6% to cross $182.81 to become the first company to hit the $3 trillion market cap
· Morgan
Stanley raised Apple’s price target from $164 to $200
Apple Inc could hit a $3 trillion market value in 2022, or bigger than the economy of the United Kingdom, according to Los Angeles-based investment firm Wedbush Securities.
Wedbush analyst Daniel Ives has an outperform rating and $175
price target on the company, with the bull-case price target at $225.
The Cupertino giant needs to rise another 6% to cross $182.81
to become the first company to achieve the milestone, to which Ives told CNBC
that he thinks will happen within the next 12 to 18 months.
The iPhone maker jumped more than 2% to $ 174.87 on Wednesday in the New York
trading session, hitting the market cap of $2.87 trillion.
$200 a share price target
Morgan Stanley on Tuesday raised Apple’s price target from
$164 to $200 and maintained the equivalent of a buy rating.
However, Katy Huberty, the MS analyst, mentioned that the new
expected products from the company, like an augmented reality headset or
self-driving car, weren’t considered while raising the price target.
The share of the Cupertino giant jumped more than 3.5% on
Tuesday, reaching a new all-time high.
Apple crossed the first trillion-dollar market cap in 2018
and the $2 trillion mark in 2020.
Earlier this year, investors dumped the stocks following a
historic December quarter.
Software services
Apple has been viewed as a hardware company for years until
the current CEO, Tim Cook, started pushing the narrative that the firm’s iOS
operating system has a services ecosystem since 2018.
Ives told CNBC that at the moment, the company is laying the
foundation for the next stage of growth where software and services play essential
roles, which is built around a base of more than one billion Apple device users.
Ives values Apple’s software services business at about $1
trillion currently and expects it to increase to about $1.5 trillion, which
would help the company to hit the market value of $3 trillion.
Risks to $3 trillion target
However, according to Ives, several potential risks could
hinder Apple from reaching the milestone, including a court battle with Epic
Games, maker of the video game Fortnite, where Cook faced questions from the
judge last month.
Ives also pointed to growing regulatory scrutiny around the
world.
In April, The European Commission said that Apple “abused its
dominant position” in distributing music streaming apps through its Apps Store,
in another lawsuit that Spotify filed.
Moreover, for the first time in more than a decade, Apple had
to halt production for its iPhone and iPad “for several days,” before the holiday
season after facing supply chain limitations and China’s ongoing power
restriction, Nikkei reported.
The company has also told its parts suppliers that demand for
its flagship iPhone 13 lineup has weakened, Bloomberg reported last week, indicating
that the supply chain issue has somewhat dented Apple’s hardware business.
Picture Credit: Finbold