Can Apple Return to All-Time High of $700?

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After a year and a half of on-and-off skepticism about its prospects, Apple Inc.’s (NASDAQ: AAPL) shares could breach their all-time high of $705.07 reached on September 21, 2012. The stock topped $644 last week, and a number of analysts have upped targets — in some cases above $700.

Several catalysts could spring the stock higher. First among them is the anticipated release of the iPhone 6. Much of the speculation about the smartphone is that it will not be much of an advance from the present generation iPhone. However, there have been rumors that the iPhone 6 could be something of a “life management” tool that will allow people to control everything from the temperature of their homes remotely to telling owners when they will get the flu days ahead of time.

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Another chance for Apple to launch a product that could transform its image back to that of the world’s most innovative company is the release of the iWatch, which may occur in the next month — in time for the holiday sales period. It is anyone’s guess how the product could be more useful than a smartphone. The only way to reverse that impression is if the iWatch is a smartphone in a smaller package. That is unlikely, but Apple has pulled off the improbable before. That was its image just three years ago.

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Another factor in the improvement in share price is a new iOS release, which could be launched at Apple’s developers conference that begins June 2. The next generation will be called iOS 8. According to MacRumors:

One of the major new features expected in iOS 8 is “Healthbook”, a system for keeping track of and providing at-a-glance access to various types of health and fitness information. The system would be ideal for interfacing with Apple’s rumored iWatch with built-in biometric sensors, but even before that device’s introduction would also be useful for collecting data from sensors within the iPhone and third-party health accessories.

Finally, there is the matter of Apple’s earnings, which have been a disappointment to Wall Street recently. Apple’s forecast for the current quarter was lackluster:

Apple is providing the following guidance for its fiscal 2014 third quarter:

  • revenue between $36 billion and $38 billion
  • gross margin between 37 percent and 38 percent
  • operating expenses between $4.4 billion and $4.5 billion
  • other income/(expense) of $200 million
  • tax rate of 26.1 percent

A huge surge in iPhone 6 smartphone sales at the end of the quarter could push sales higher than Apple’s revenue target. And that, as much as anything else, could trigger a $700-plus share price.