Could Apple's Market Cap Hit $4 Trillion in 2022?

Motley Fool2021-12-31

Shares of technology giant Apple (NASDAQ:AAPL) soared in 2021. As of Dec. 30, the stock had gained 34% in 2021. This put the market cap at more than $2.9 trillion.While many recent headlines about the...

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Comments

robot1234
2022-01-03
robot1234
Many US MNC such as Tesla and Apple are highly dependent on the Chinese market. Hope they will no be caught between a rock and a hard place in the deteriorating Sino-US relationship
vincentheng8
2022-01-03
vincentheng8
All in aapl to vr n icar
ahleemama
2022-01-02
ahleemama
Gd job
Sheyik
2022-01-02
Sheyik
Yes
- ahleemama:
  sad
- Shinshinc:
  same
5eda9426
2022-01-02
5eda9426
[Like]
CloudLoo
2022-01-02
CloudLoo
👍

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As of Dec. 30, the stock had gained 34% in 2021. This put the market cap at more than $2.9 trillion.While many recent headlines about the...</p>\n\n<a href=\"https://www.fool.com/investing/2021/12/31/could-apples-market-cap-hit-4-trillion-in-2022/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4505","symbol_name":"高瓴资本持仓","start_time":0,"source_url":"https://www.fool.com/investing/2021/12/31/could-apples-market-cap-hit-4-trillion-in-2022/","article_id":"2195448557","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2195448557","pubTimestamp":1640964603,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"As the Street wonders when Apple can break through the $3 trillion mark, investors should look even further ahead: Is a $4 trillion market cap on the horizon?","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4505":"高瓴资本持仓","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4534":"瑞士信贷持仓","BK4170":"电脑硬件、储存设备及电脑周边","BK4515":"5G概念","BK4535":"淡马锡持仓","BK4525":"远程办公概念","BK4503":"景林资产持仓","BK4538":"云计算","BK4566":"资本集团","BK4211":"区域性银行","BK4507":"流媒体概念","BK4516":"特朗普概念","BK4527":"明星科技股","FCF":"第一联邦金融","BK4097":"系统软件","BK4553":"喜马拉雅资本持仓","BK4567":"ESG概念","MSFT":"微软","BK4528":"SaaS概念","AAPL":"苹果","BK4559":"巴菲特持仓","BK4532":"文艺复兴科技持仓","BK4548":"巴美列捷福持仓","BK4501":"段永平概念","BK4504":"桥水持仓","BK4550":"红杉资本持仓","BK4554":"元宇宙及AR概念"},"translate_title":"苹果的市值能在2022年达到4万亿美元吗？","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MSFT":1,"FCF":1,"AAPL":1},"content_text":"Shares of technology giant Apple (NASDAQ:AAPL) soared in 2021. As of Dec. 30, the stock had gained 34% in 2021. This put the market cap at more than $2.9 trillion.While many recent headlines about the company have focused on its market capitalization approaching $3 trillion, investors might be wise to consider an even more bullish target: $4 trillion. Indeed, a close look at the stock suggests that a $4 trillion market cap could be within reach for the tech company in the near future -- possibly even within 2022.Image source: Getty Images.The path to $4 trillionA close look at Apple stock's conservative valuation and the company's broad-based momentum makes a good case for shares being undervalued today, setting the stage for a potential $4 trillion market capitalization in 2022.The first way Apple stock could gain is simply through expansion in its valuation multiple. Some megacap stocks trade at substantially higher multiples relative to their free cash flow (FCF) than Apple does. If Apple can close the gap and command a similar premium, multiple expansion alone could help the stock rise substantially.Consider that Microsoft (NASDAQ:MSFT) trades at 42 times its free cash flow. Apple, meanwhile, trades at only 31 times its FCF. Apple's stock price would have to rise 35% for its FCF valuation multiple to match Microsoft's. This alone would put the company's market capitalization at about $4 trillion.There is actually a good case for Apple stock's valuation to see multiple expansion in the coming years: The tech giant's services business, which is a more reliable revenue source than its products, is growing as a percentage of Apple's total business. With a more predictable and reliable revenue source (that appears to still have lots of upside) increasingly driving Apple's growth, investors may start rewarding the stock with higher valuation multiples. In fiscal 2021, Apple's services revenue was 19% of revenue, up from less than 18% of revenue two years ago and 15% three years ago.But even without this much multiple expansion, strong fundamentals could lift Apple shares meaningfully in 2022 and beyond. Consider that the company is seeing strong double-digit revenue growth recently, with record fiscal fourth-quarter revenue across every geographic and product segment. Specifically, Apple's fiscal fourth-quarter revenue came in at $83.4 billion, up from $64.7 billion in the year-ago quarter. But management estimates that revenue for the period would have been $6 billion higher if it weren't for supply constraints during the period.Suffice to say, Apple's business is firing on all cylinders. With momentum in every geographic and product segment, it wouldn't be surprising to see double-digit growth rates in the company's revenue and free cash flow in fiscal 2022, providing solid substance for more share gains.Expect a bumpy rideWhile it is possible that Apple's market capitalization swells to $4 trillion before the end of 2022, there are no guarantees in investing. Even if everything goes well for Apple as a business, the stock itself could do poorly in the near term. Sometimes, for one reason or another, stocks fall in and out of favor. So even though shares appear undervalued today, the stock could fall before it rises.And there's always a chance that Apple sees multiple compression instead of multiple expansion. While Apple's business fundamentals appear worthy of a Microsoft-like premium, the company's shares have usually traded at a discount to Microsoft's in terms of valuation multiples because Microsoft's business model is considered to be more sustainable and less dependent on blockbuster product hits like new iPhones. Apple notably also makes more than half of its sales from a single product: the iPhone. Its heavy reliance on a single product segment generally makes Wall Street view the stock as risker than Microsoft, which has a business primarily made up of recurring revenue from various software and services sources.But given Apple's long history of pricing power, loyal customers, and an ability to bring to market products in entirely new categories every now and then, the tech company will likely keep succeeding -- and its market cap could march toward $4 trillion.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9001953928,"gmtCreate":1641164619524,"gmtModify":1676533576434,"author":{"id":"3561596430587504","authorId":"3561596430587504","name":"robot1234","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":6,"crmLevelSwitch":1},"htmlText":"Many US MNC such as Tesla and Apple are highly dependent on the Chinese market. 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