Wedbush says Apple could be valued at $4 trillion by 2025
Since going public in December 1980, Apple’s shares are up nearly 86,000%
Wedbush tells clients about Apple’s relative strength during the shares’ recent journey back to the $3 trillion mark after selling off starting in January 2022. Apple, Wedbush writes, “navigated a myriad of China supply chain challenges along with a softer macro over the last 18 months in Rock of Gibraltar fashion, and thus Cook and Cupertino find themselves back against all odds (from the bear view) on the doorstep of the $3 trillion market cap threshold this week.”
And as we hear often from those working on the street called Wall, the next iPhone models will launch a super cycle. In this case, though, Wedbush calls the iPhone 15 story “a mini super cycle” in the making as it expects a quarter of those iPhone owners who have failed to upgrade over the last four years to do so starting this year. Of course, every year there is at least one securities house calling for an iPhone super cycle.
Apple’s shares will be driven by its second-largest business unit after the iPhone
But it isn’t the iPhone that has Wedbush analysts salivating over Apple’s shares. Talking about Apple’s services revenue (the unit is Apple’s second largest after the iPhone), Wedbush says that when it comes to services Apple is playing chess when others are playing checkers. The firm notes that for fiscal 2024, Apple is on pace to reach $100 billion in revenue compared to the $50 billion generated by the unit in fiscal year 2020.
The note to clients says, “Herein lies the key to the valuation re-rating that we believe will continue to take place around Apple’s stock as the Street further appreciates the sheer massive potential of this services revenue that we now assign a valuation in the $1.4 trillion range.” Apple’s services unit includes the App Store, Apple Pay, iCloud, Apple Music, Apple News+, Apple TV+, Apple Fitness, Apple Card, Apple Arcade, Apple Books, Apple One, and more.
A rough back-of-the-envelope calculation shows that for Apple to reach a $4 trillion valuation, the shares would have to rise approximately 34% from the current price to $253.74.
