pple stock has recently reached a market capitalisation of $2 trillion, and Wall Street analysts have already begun discussing how much further it could climb, with one Apple analyst believing it could reach a $3 trillion value, but he's not sure how long it will take.
In an interview, Loup Venture Managing Partner, Gene Munster stated:
"Three years ago, it was hard for many to imagine that Apple would reach a $1 trillion market cap… Two years ago, it was equally difficult for some to imagine $2 trillion. While we understand that, for some investors, $3 trillion is even harder to envision, we believe there is a clear path to that next milestone."
Apple stock reached a $2 trillion market cap last Wednesday by following "an under appreciated playbook," Munster commented. He believes Apple has accomplished this by building a high-quality product which enriches the users lives, then Apple reinvents itself each decade, Munster said. Apple began as a personal computer company, then transformed into a device company with the iPod and then a mobile company with the iPhone and now it has become a services company.
The Path To $3 Trillion Begins With 5G
When asked how he though the path to reaching $3 Trillion would begin, Munster stated:
"The path to $3 trillion starts with the fact that the world has changed... Apple's current and future golden geese (wellness, AR, autonomous systems) are becoming more central to our lives in this new world."
The transition to 5G wireless, will start Apple's journey to the $3 trillion milestone, with Apple's new iPhone 12 release this fall will feature its first 5G smartphone.
Munster explained:
"5G will drive a three-year device upgrade cycle along with 5G-related benefits of opening new mobile use cases"
In the coming years, Apple will be able to offer a 360-degree bundle of hardware, software and services, while simultaneously growing its streaming entertainment businesses to garner a larger share of media consumption. Included in Apple's streaming services are Apple TV+ and Apple Music. As well as this, Apple have forged their place in the digital health market with the Apple Watch with plans to expand its presence in that market over the next decade.
Augmented Reality Will Give Apple Stock A Boost
AR will be one of the elements that will assist Apple to get to the $3 trillion market cap, according to Munster stating he sees AR becoming "the next major computing platform with Apple Glasses available sometime around 2022,". Apple is among a host of technology companies trying to develop smart glasses.
Apple is also likely to develop autonomous systems, "While it's unclear what form it will take, we expect Apple to make a play in autonomy," Munster said.
Apple stock climbed 2.2% to 473.10, which gave it a market value of $2.023 trillion. Earlier in the session, Apple stock notched a record high of 473.56.
Munster was willing to say that the journey to $3 trillion could happen within this decade and we’ll be watching it every step of the way.
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