$300 an Apple mile marker, not milestone

The tech giant will leave the record share price in the dust it rises much higher.

By Jim Cramer Oct 14, 2010 9:38AM

jim cramerBy Jim Cramer, TheStreet

 

What's the significance of Apple (AAPL) crossing $300? Not much, frankly. In fact, I am reminded of Hyman Roth's eulogy of the dearly departed Moe Greene -- $300 seems no more than a "desert stopover for GIs on the way to the West Coast." I believe that $300 will not warrant a plaque or a signpost or a statue on the way to much higher prices for the computer and entertainment giant.

 

On Tuesday, in my talk at the 92nd Street Y, I again had to remind people that Apple had now gone from $200 to $300 in the past year and that $400 wouldn't be so extreme. We would accept such a move from most companies that are doing well, with accelerating fundamentals.

 

Of course we are bumping up against all sorts of other constraints: the law of large numbers, the disbelief that this company could be worth more than Exxon (XOM) one day and worth more than Microsoft (MSFT) today. The recognition that when we put so-called outrageous valuations like Apple's on stocks before, in the 1999 time frame, it all ended badly.

 

You always fear rationalizing a move like this that creates such a huge market capitalization. But the best way to envision what is happening here isn't just that Apple could earn $22 a share in fiscal 2011 or that it might have $100 billion in revenue if dreams of 40 million iPad sales and a Verizon (VZ) iPhone pickup come true.

It's what's in Apple's wake that matters. If you go listen to Intel's (INTC) conference call, you are going to hear a confident Intel talking about its entry into the tablet market. But maybe Apple is going to Zune the iPad market (to use as a metaphor the perhaps better musical gizmo from Microsoft).

 

Maybe Apple can do the same thing to the entire PC and mobile device market that it did to music? Is that worth only the additional $100 billion in market cap that the company has tacked on since the release of the iPad and the new iPhone? Do we really think that only $100 billion in value has been destroyed by this behemoth?

 

Yeah, to me, $300 a share isn't much at all. It's Vegas.

 

California beckons.

 

At the time of publication, Cramer was long Apple and Intel.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to follow Cramer's trades for his Charitable Trust.

 

Related Articles

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
265
265 rated 2
429
429 rated 3
612
612 rated 4
499
499 rated 5
525
525 rated 6
701
701 rated 7
533
533 rated 8
337
337 rated 9
131
131 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
COPCONOCOPHILLIPS9
TAT&T Inc9
DVNDEVON ENERGY CORPORATION9
EOGEOG RESOURCES Inc9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.