Apple Stock Is Near a Record High. What Could Get It There

Apple stock has been on a tear this year. With a few catalysts in the coming weeks, the stock could hit an all time high.

Apple stock (ticker: AAPL) has jumped 38.6% so far year on solid earnings, after stronger-than-expected sales in the the iPhone unit.

The stock rose 1.6% in Thursday trading to $180.09, which would be its highest close since January 2022, and within striking distance of the all-time high of $182.01, also set that month.

Apple’s annual Worldwide Developers Conference, or WWDC, begins on June 5. The tech giant typically announces its upcoming products at the gatherings, and investors will be keen to hear launches and business updates.

Wedbush analyst Dan Ives told Barron’s that he thinks investors mostly want to hear about the company’s future in artificial intelligence, and any update on that could drive Apple stock higher.

“Any mention and blueprint outline of a broader AI strategy for Apple could be a potential game-changer,” Ives said. He rates Apple stock at Outperform, and his price target of $205 already projects shares setting a new record.

Major tech companies such as Microsoft (MSFT) and Alphabet (GOOGL) have been racing to come out with AI products, with the popularity of ChatGPT raising the stakes as what AI could do for a company. Apple hasn’t yet been very vocal on its plans with AI.

Apple stock could have an outsize response to new products, such as alternative reality goggles, which could cost around $3,000 a pair.

Updates to the iPhone, whether it’s information on an iOS 17 update or the new iPhone 15, would also be key. New iPhones with better features could nudge millions of users who haven’t upgraded in recent cycles to do so, boosting revenue and driving the stock higher.

Near-term risks abound however. For one, the consumer has been pinched by ongoing inflation and high interest rates. A weak consumer could mean weak sales for Apple. There are also concerns that China will lock down again with rising Covid-19 cases. This brings bad memories to Apple investors after the worlds largest iPhone maker in China was shut down due to Covid-19 infections last year.

“This stock goes up and down with the direction of China, and I think any supply-chain issues or tick down in demand in China would be the biggest risk for Apple,” Ives said. “But at least, I believe, right now the bark has been worse than the bite.”

Apple stock is currently trading at 27.7 times forward earnings, above its historical average of 22.5 times. This might be too expensive for some investors to buy in now.

Regardless of the risk, Apple stock is on a roll, and the most valuable publicly traded company in the world could see its market capitalization continue to soar.