Analysts see Apple valuation over $2 trillion due to potential iPhone 12 ‘supercycle’

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Wedbush analyst Dan Ives and Deutsche Bank analyst Jeriel Ong have raised their price targets for Apple stock above the $2 trillion mark. Ives believes that the iPhone 12 will be in high demand because many more users than normal are ready to upgrade their iPhones.

Apple’s stock opened Monday morning at $450.40, with a market cap of 1.9 trillion after the analysts raised their targets. Ives raised his price target for Apple by $35 to $515 per share, and Ong increased his target by $40 to $480. Ives also shared a potential bull case where Apple’s stock could rise all the way up to $600. To get to the $2 trillion value Apple has to hit a stock price of 467.77.

Ives has been bullish about Apple in the past, and this year has talked about the importance of the iPhone 12 series. Ives believes that around 350 million iPhones are ready for upgrade, and that this will continue to push Apple stock higher. Ives wrote about this ”supercycle” saying:

“Apple has a “once in a decade” opportunity over the next 12 to 18 months as we estimate roughly 350 million of Cupertino’s 950 million iPhones worldwide are in the window of an upgrade opportunity,”

Ives even went as far as to say that this will be a release cycle akin to the iPhone 6, calling it a “supercycle”. The iPhone 6 and 6 Plus are the best selling iPhones ever and Ives seems to think that the iPhone 12 series will do just as well. He also says that iPhone 12 sales will do this well despite less consumer spending:

“Taking a step back we believe iPhone 12 represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment in our opinion.”

Ives was asked on CNBC if he sees the possible TikTok and WeChat ban affecting the Chinese iPhone 12 sales and he said he did not. He thinks that Apple may only be requried to remove WeChat from the U.S. App Store and not the Chinese App Store. This isn’t too different from what Ming-Chi Kuo reported. Kuo just focused on if the ban would hurt Apple whereas Ives focused on if the ban would affect the Chinese App Store.

Ives also sees 5G in all of the iPhone 12 series and he sees that pushing the device sales. This combination of 350 million iPhones ready to be upgraded and a new iPhone series with potentially a lot of feature updates could bring many people to upgrade. Possible new additions to the iPhone 12 like 5G, smaller sized notch, smaller bezeles, and an updated camera system could help in encouraging many people to buy. The delayed release of the devices could also actually cause more upgrades as many will likely be in a better economic situation and their current devices will be older.

It was just over 2 years ago on August 2nd, 2018 that Apple became the first $1 trillion publicly traded company. Microsoft and Amazon are both around a 1.6 trillion market cap, while Apple is at 1.9 trillion. Apple stock seems to continue to move higher and higher, so will we see Apple become the first publicly traded $2 trillion company, or will someone else quickly catch up?

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