Apple Set to Break $3 Trillion Market Cap Today

Apple is set to break the $3 trillion market cap today in a historic day for the tech sector. The company first hit the $3 trillion mark back in January 2022 but has had to navigate numerous supply chain issues and a softer macro over the last 18 months.

In a new report, Wedbush predicts a mini super cycle for the iPhone 15 with roughly 25% of Apple's golden customer base not upgrading their iPhones in over 4 years. Additionally, the company sees massive potential for Apple to generate services revenue in 2024 and 2025.

Apple playing chess while others play checkers. In FY24 the Cupertino stalwart is on pace to approach $100 billion of annual services revenue growing double digits which is a jaw dropping trajectory vs. the roughly $50 billion+ of services revenue that Apple was delivering only in FY20. 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. We believe Apple's fair valuation could be in the $3.5 trillion range with a bull case $4 trillion valuation by FY25.




Additionally, Wedbush is excited for the new app store that will be built around Apple Vision Pro.

This product and application build out could be another tailwind to Services revenue in FY25 as more consumers start to make the path down the mixed reality headset with Apple as Vision Pro price points start to come down markedly in FY25. We continue to strongly believe this is the first step in a broader strategy for Apple to build out a generative AI driven app ecosystem for its golden customer base that will have thousands of use cases across fitness, health, sports/movies via Apple and partner (e.g. Disney) content, and a myriad of other areas just starting to take shape with developers.

Wedbush maintains an OUTPERFORM rating for AAPL and $220 price target.