Sometime in 2021 Apple will be the world’s first $2 trillion company, predicts Wedbush analyst Dan Ives in his latest note to clients.
Ives — one of the most bullish of Apple investors — believes that Apple’s “5G tailwinds and services momentum” has the potential to push it past the $2 trillion market cap.
Ives writes Apple’s $2 trillion valuation will depend partly on China:
“China remains a key ingredient in Apple’s recipe for success as we estimate roughly 20% of iPhone upgrades will be coming from this region over the coming year. We believe in China alone between 60 million to 70 million iPhones are in the window of an upgrade opportunity over the next year with Apple going aggressively at all price points (SE, iPhone 12) to cement its installed base despite competitive pressures from domestic players.”
Dan Ives also suggests that coronavirus has highlighted the power and potential of Apple’s Services business. While other businesses struggle, Apple’s ability to “flawlessly” sell subscription services and apps will continue to impress investors.
Elsewhere, the report confirms rumors that Apple will launch four iPhone 12 models later this year. He also suggests, backing up previous reports, that Apple will offer no wired earbuds or charger in the iPhone 12 box. This is likely to boost demand for the AirPods. “[O]ur expectation [is] that Apple is on an eye popping trajectory to sell ~90 million AirPod units up significantly,” Ives writes. That compares very favorably to 65 million units in 2019.
Wedbush currently has a price target of $450 on Apple, with a bull target (best case target) of $525. Currently, AAPL is trading at $383.68. According to Yahoo Finance, Apple’s current market cap stands at $1.66 trillion.
Apple and the path to $2 trillion
Apple being the first publicly traded company in history to hit the $2 trillion valuation wouldn’t exactly be a surprise. It was the first public company in history to reach a $700 billion, $800 billion, $900 billion, and $1 trillion valuation. One month ago, it became the first U.S. company valued at more than $1.5 trillion.
Already this year it has made up all of the COVID-19-induced losses, and only continues to climb. Frankly, it would be an upset if Apple wasn’t the first company to hit the $2 trillion mark.