Apple fever is reaching new highs on Wall Street, with two analysts predicting that the company's share price could reach $1,000 by 2014. That would make Apple, already the world's most valuable entity, the first $1 trillion company in history. Its shares are already selling for a hefty $630, but analysts argue that, given the iPhone and iPad's utter domination of their respective gadget niches, Apple stock is actually under-priced. Is Big Fruit set to break the $1 trillion mark?
Apple has nowhere to go but up: A company worth $1 trillion — which is more than the GDP of Australia — might seem preposterous, says Arthur Pinkasovitch at The Motley Fool. But it's really not "that farfetched." Apple has two clear sources of revenue growth in the future: The business community and foreign markets. "With more businesses moving away from the BlackBerry," Apple can "tap into a market where it does not yet have a dominant presence." And China, in particular, has vast potential, since the Chinese are only just latching onto the Apple craze.
"Will Apple be worth $1 trillion?"
But Apple can't coast on the iPad forever: These $1 trillion forecasts are "extremely optimistic, and assume that Apple can do no wrong," says Dave Smith at International Business Times. Apple is still "cruising off products [like the iPad] and designs" championed by the late Steve Jobs, but the company will "need yet another revolutionary device to accomplish a $1 trillion market cap." We'll have to wait and see if Jobs' successor, Tim Cook, is a similarly "eagle-eyed design perfectionist."
"Why Apple stock won't reach a $1 trillion market cap by 2014"
And these forecasts create impossible expectations: It's unlikely that Cook is sending these analysts "any thank you notes," says Larry Dignan at ZDNet. "Wild market calls" are the norm for hot stocks, but more often than not they "jinx" companies by saddling them with unrealistic expectations. Remember when Microsoft reached a market-value peak of $619 billion in 1999? Analysts made bold projections then, too, and Microsoft is now a shadow of its former self.
"The big jinx: Apple will be worth $1 trillion, says analyst"
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