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Members of the media take photos of the iPhone 11, iPhone11 Pro, and iPhone 11 Pro Max smartphones at the Apple Marunouchi store on September 20, 2019 in Tokyo, Japan.
Tomohiro Ohsumi / Getty Images
Apple’s potential plans to release a line of 5G-supported phones, as well as global e-learning and remote working trends, analyst says will likely drive up its share price .
The iPhone maker recently became the first publicly traded U.S. company to reach a market cap of $ 2 trillion, around two years after hitting the $ 1 trillion mark. Apple shares rose 1.2% on Monday.
“What is remarkable in my opinion is that Apple has reached the market cap of $ 2 trillion without selling a single 5G iPhone,” said Tom Forte, managing director and senior research analyst at DA Davidson Tuesday morning. , on CNBC’s “Squawk Box Asia”.
“As the iPhone 5G translates into several years of positive growth for smartphones, Apple stocks can continue to do well,” he added.
5G refers to the fifth generation of high-speed mobile internet that aims to provide faster data speeds and more bandwidth to carry increasing levels of web traffic.
Apple is currently the third largest smartphone maker by shipping behind Huawei and Samsung. A report from the Nikkei Asian Review said the US tech giant is expected to release four models from its 5G lineup with three different screen sizes. The report also states that Apple faces delays of four weeks to two months for mass production.
Distance work and online learning
Due to the coronavirus pandemic, more and more people are now working remotely and have embarked on e-learning.
Forte cited calculations from Logitech, which said last month that around one billion people are now working from home.
“So based on that, what you’ve seen is the strength of tablets, the strength of laptops, for Apple, in addition to strong iPhone sales. As consumers continue to work remotely. and learn remotely, I think we’ll see more strength in tablets and laptops, ”Forte added.
In July, Apple had a historically strong third quarter with double-digit growth in its product and service segments. Despite widespread store closures during the quarter due to the pandemic, Apple said its overall operations had been boosted by trends in work-from-home and online sales.
Forte said Apple’s exposure to China, where iPhone sales rose sharply in the June quarter, could be a “significant risk” amid lingering tensions between Washington and Beijing.
Stock splits and price targets
The company also announced a 4-to-1 stock split where for every Apple stock held by an investor, they will receive three more shares. This makes unique Apple stocks more affordable for investors.
Forte said there was a chance stocks would continue to climb following the split. DA Davidson previously raised its price target from $ 355 per share to $ 480. Apple is currently trading above $ 500 and Forte said the company’s price target is now under review.
Morgan Stanley in a separate note on Sunday raised its price target for Apple shares from $ 431 to $ 520. The investment bank said it expects sustained growth in services and the iPhone 5G cycle to drive double-digit revenue growth in fiscal 2021 in its baseline assumptions.
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