End to China trade war could bring back Apple’s $1 trillion valuation


China Mobile dual-SIM iPhone
Impending trade war with China has hurt Apple.
Photo: China Mobile

Wedbush Securities analyst Daniel Ives thinks that a resolution to the burgeoning trade war between China and the U.S. would bump Apple back up to $1 trillion in value.

Apple is currently trading at $191.33. Another $28 a share would take Apple back to the 13 figure milestone it managed last year.

In a note to investors, Ives noted that a resolution to the trade war would, “take away the primary China risk which is a dark cloud over the stock now.”

Ives thinks that Apple is currently the safest of the FAANG stocks, which also include Facebook, Amazon, Netflix and Google. That’s because it is unlikely, in his view, to be hit with a successful antitrust case. Recently, I broke down some of the potential monopoly arguments which could be made about big tech. Apple does not appear to contravene them.

The only thing Ives thinks could hurt Apple would be the U.S. increasing tariffs on China. This could be a “game changer” for the company, and cause it to increase the price of iPhones. However, multiple suppliers are currently working to de-risk this by moving manufacturing out of China. Foxconn, which assembles many of Apple’s products, has said that it could produce all U.S. iPhones outside China.

Apple made history like summer

Apple hit the $1 trillion milestone last summer. This made it the world’s first public company to reach this valuation. Since then, both Microsoft and Amazon have also achieved this benchmark.

In May, it was reported that Apple had returned to $1 trillion+ in market cap. However, this was incorrect: the result of misinformation about the number of outstanding shares. Due to Apple’s share buyback program, there were fewer shares around. As a result, they had to hit a higher valuation to take Apple into $1 trillion territory.

Going by Apple’s current trading price, the company is valued at $876.6 billion.

Source: Bloomberg