Apple headed to $800 per share
With the stock now trading above $700, it should have no problem going higher.
News media and analysts have been writing about the Apple (AAPL) iPhone 5 since iPhone 4S sales slowed and the gadget maker reported disappointing earnings for the first time in a long time.
Many of the opinions at the time went something like "Sales were slower than usual at Apple, but it's just in anticipation of the iPhone 5." And while that seemed like an easy call -- if not downright lazy -- it looks like it was the right one.
The stock traded above $700 for the first time on Tuesday. Next target: $800. I think Apple has the umph to do it. Here's why:
- Preorders: The company announced that it sold more than 2 million of the iPhone 5 in the first 24 hours of preordering. That's twice the rate at which the company sold the iPhone 4S.
- Global sales: The iPhone 5 will roll out worldwide to more than 22 countries on September 28.
- Carrier sales: Customers ordered more iPhones from AT&T (T) than any previous model both on its first day of preorders and over the weekend.
- Growth in global sales: Apple's plans for an iPhone 5 ramp to 240 carriers in 100 countries by year end. This is very aggressive, but given consumer pull through, in my view it's achievable.
- Legal maneuvers: On Friday, a judge at the International Trade Commission said in a preliminary ruling that Apple did not violate patents owned by Samsung Electronics (SSNLF) in making the iPod touch, iPhone, and iPad.
The unknown unknowns notwithstanding, I feel confident that Apple will break $800 a share. The long customer lineups will appear and the phones will ship, and we haven’t even brought up the iPad mini yet.
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The company is scrambling to protect its equities arm, which could face declining volume and revenue as competitors close the gap.
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