Apple Market Cap Approaches $800 Billion, a Record

March 7, 2017 by Douglas A. McIntyre

No company’s market cap has ever reached $800 billion. Apple Inc. (NASDAQ: AAPL) is about to touch that goal. It only has to go 9% higher. And, based on the stock surge this year and speculation that the iPhone 8 will trigger unprecedented demand for the smartphone, it may breach that level soon.

Apple has posted the largest increase in share price this year of any component of the Dow Jones Industrial Average. It trades 20% higher than at the start of 2017, at a record price of $139. The Dow has risen only 6% to 20,954.

A number of securities analysts who cover Apple have prices targets well in excess of its current price. As just one example, Rob Cihra of Guggenheim Securities recently raised his price target from $150 to $180. Many analysts have price targets in excess of the $150 level.

There are two primary mitigating factors to a continued run up in Apple’s share price. One is the quarterly earnings report at the end of April. The most recent quarter set a high hurdle, which analysts do not think the company can approach again soon. This is because it was the period that includes the year-end shopping season. Revenue was $79 million, and Apple sold 78.3 million iPhones. Its forecast for the current quarter:

  • revenue between $51.5 billion and $53.5 billion
  • gross margin between 38 percent and 39 percent
  • operating expenses between $6.5 billion and $6.6 billion
  • other income/(expense) of $400 million
  • tax rate of 26 percent

If it can top those numbers, shares almost certainly will react positively.

The other reason Apple’s stock may trade up is rumors about the iPhone 8. Many suggest features that would be a leap ahead of competition. MacRumors expects these features will include the following:

Apple has a major iPhone redesign planned for 2017, with a glass body and edge-to-edge OLED display that includes an integrated Touch ID fingerprint sensor and front-facing camera. The new iPhone may be sold alongside upgraded (but standard) 4.7 and 5.5-inch iPhones.

Apple’s share price has risen relentlessly since last May. It would not take much in the way of positive news to have the trend continue.

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