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Gene Munster says Apple’s stock has a path to $3 trillion market cap


#Tech investor #Gene #Munster told CNBC on #Thursday he sees a reasonable path for #Apple to reach a $3 trillion market capitalization in the future.

The iPhone maker became the first publicly traded U.S. company to reach a $2 trillion market cap in #August — a milestone #Munster foresaw in #January, when he made the case for the stock to trade 50% higher. #As of #Thursday, with its stock around $133 per share, #Apple was valued at almost $2.3 trillion.

#Munster, who covered #Apple as a longtime analyst at investment bank #Piper #Jaffray, said on “#Squawk #Box” that he believes the #California-based company can realistically reach $200 per share. #That would put its market cap over $3 trillion.

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“#It needs to be anchored in earnings. #That’s the powerful piece about the #Apple story,” said #Munster, who co-founded venture capital firm #Loup #Ventures. #He said his prediction is based on #Apple trading at a price-to-earnings ratio, or multiple, of 35 for 2022 earnings estimates.

“#It’s a year out there but I’m fast-forwarding the conversation to the middle and back half of next year, and we’ll be talking about 2022 at that point. #If the market can sustain these 35 multiples — you know, we’re not talking about an #Amazon-like multiple here — I think that that path is there,” #Munster said.

#Apple’s current price-to-earnings ratio is almost 41, after the stock soared about 81% this year. #Amazon, which has seen its stock rise about 76% this year, trades at roughly a 95 multiple.

#One catalyst that could help propel #Apple higher is the larger adoption of remote work spurred on by the coronavirus pandemic, #Munster said.

“#This is generally thought of as a play on iPhone, a 5G play. #That’s good. #That will impact the numbers in a positive way, but this acceleration of digital transformation, I think it’s powerful,” #Munster said. “#People working from anywhere are going to be arming up in the next 12 to 24 months, buying more #Macs, iPads, services.”

#Munster also repeated his belief that #Apple’s multiple could withstand further expansion as investors reconsider the company, which has in recent years pushed to generate more revenues from services to augment its sales of hardware.

#For his part, #Munster said he thinks #Apple could leverage its hardware business into a service, such as buying a #Mac on a subscription. “#We believe that that’s coming, and more talk about autos is a big opportunity for #Apple’s multiple,” #Munster said, alluding to reports about #Apple potentially making an electric car in a few years.

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#More generally, he said he believes #Apple will continue its strong stock performance in 2021, especially compared with its so-called FAANG brethren. #In addition to #Apple, the group of tech companies also includes #Amazon, #Facebook, #Google-parent #Alphabet and #Netflix.

“#We think that there will be a further fracturing of FAANG,” #Munster said, with #Facebook and #Netflix lagging #Apple and #Amazon. “I think for 2021, the performance is going to come again from #Apple. #It may seem tone deaf for a company to lead FAANG for three straight years, but I think that in fact will happen. I think this has a track to $200 [per share].”



[ source link ]
https://www.cnbc.com/2020/12/31/gene-munster-says-apples-stock-has-a-path-to-3-trillion-market-cap.html

##Gene ##Munster ##Apples #stock #path #trillion #market #cap

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