Back in 2018, tech giant, Apple hit the magical milestone of a market cap of $1 trillion, and at the time it seemed quite unbelievable. However, if an analyst is to be believed, then the market cap of Apple Inc. (NASDAQ:AAPL) could hit $2 trillion in a few years.
If it does then, it is going to be a bonanza for long term shareholders, and hence, it could be worthwhile to examine this claim. Analyst Amit Daryavani of Evercore stated that the Apple stock could jump to $550 a share from $323 a share in a few years, and that will see its market cap go from $1.4 trillion to $2 trillion.
The analyst has claimed that Apple’s fast-growing services and wearable businesses are going to be the main drivers for the company to boost its earnings per share to $23 by 2024. He went on to state that revenue from services could hit $100 billion by that time and that from wearable could be $60 billion.
Daryavani also expects the gross margins to rise substantially, and that, in turn, could lead to investors paying a premium for its stock. He believes the stock could be trading at 24 times its earnings per share of $23 by 2024, and that works out to a share price of $550 a share.
In addition to that, he went on to state that Apple could buy back as many as 1 billion shares in the next four years, and that is going to reduce its outstanding shares to 3.5 billion in 2024. A share price of $550 then works out to a market cap of $2 trillion.
At first glance, it might seem outlandish to fathom that Apple is going to be worth it, but when one looks closely into it, the projection does not seem unreasonable at all. The company’s wearable and services businesses are expanding rapidly, and new products are expected to be introduced in those segments. Hence, it could also see Apple hit that magical mark sooner than 2024.