Freshman economics students will tell you that something is only “worth” whatever other people are willing to pay for it. In the case of Apple Inc, that means the company is now valued at $800 billion, a new all-time high for the company. But according to analysts, Apple could be on track to break $1 trillion if it plays its cards right.
Apple’s stock briefly surpassed $153.44 per share today. With Apple’s 5.214 billion shares on the market, that means the company’s market cap is greater than $800 billion. The new high comes just weeks after Apple blew through $750 billion, a milestone at the time.
Anticipation surrounding Apple is reaching a frenzy currently, as a mix of factors are pushing investors ever higher. The iPhone 8, widely expected to launch late this year or early 2018, is predicted to start a “super-cycle” of upgrading, which will make Apple a brand-new wave of profit.
Wider economic factors unrelated to the product lineup are also in Apple’s favor. Apple has some $250 billion in cash, mostly held overseas, which it doesn’t return to the US thanks to the 35% tax that would impose. President Trump, however, has hinted at the possibility of a one-time tax break to encourage companies to bring their cash back to the US. A break, expected to be around 10%, would enable Apple to return cash to the US, and use it to either invest, or return to shareholders. Either scenario would be favorable for investors, hence the excitement.
Finally, a general rally in the US stock market is also playing in Apple’s favor. The NASDAQ 100 closed at an all-time high last week.
Despite the optimism, there’s still some notes for concern. Apple’s $250 billion in overseas cash is tempered by over $100 billion in debt that it has in the US. Since it can’t use any of its overseas cash, it has been using debt to conduct its share buyback program, invest in new technologies, and issue dividends.