“A million dollars isn’t cool,” says Justin Timberlake’s Sean Parker during one scene in The Social Network. “You know what’s cool? A billion dollars.”
If that’s the case, then people are going to need to come up with new words to describe Apple, because according to some of Wall Street’s best and brightest, the company could hit a trillion dollar valuation as early as next year.
Apple’s current market cap stands stands at around $670 billion. While it may seem (and is) quite a leap from there to $1 trillion, consider that shares in the company have gained around 42% this year, based primarily on massive iPhone sales.
Michael Corcelli, head of the Miami-based Alexander Alternative Capital, thinks the billion dollar valuation could happen in 2015.
Steve Einhorn, a top executive at Leon Cooperman’s $10 billion hedge fund Omega Advisors, meanwhile describes Apple as, “an attractively priced, double-digit returner” and says it will hit $1 trillion “eventually.”
Having split 7-to-1 earlier this year, Apple stock received even more focus than usual recently when activist investor Carl Icahn described it as undervalued, and argued that it should be worth double what it currently is.
With record sales of the iPhone, iPad and other devices expected this holiday season, Apple’s hot streak doesn’t look set to slow down any, either.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
One response to “Big investors think Apple could hit $1 trillion market cap in 2015”
Apple’s Net Income in 2014 FY is $40 Billion. $40 B a year for the next 20 years at 2% real discount rate has a present value of $654 Billion. (Apple’s market cap right now is about $670B.) So if 20 yrs at 2% is implicitly what the market is using to evaluate Apple’s market cap, to get to a $1 Trillion valuation, annual net income has to go up to the $60 Billion levels. i.e. up 50% from current levels. Achievable?