To The Moon

After struggling through nearly all of 2022, Apple stock is suddenly within striking distance of the $3 trillion market cap. Here’s what could send AAPL past the milestone.

The 2022 selloff in Apple stock may finally be over. After stringing together 11 consecutive trading days of gains, the Cupertino company’s equity is within striking distance of being valued at $3 trillion once again.

Below, we discuss how far AAPL currently is from the milestone. We also present the potential near-term catalysts that could take Apple stock to all-time highs very soon.

Figure 1: Apple Stock: One Good Day Away From $3 Trillion.

AAPL: the road to $3 trillion

I have recently estimated that Apple will likely have 16.4 billion diluted shares outstanding at the end of the current quarter, which is only a couple of days away. This being the case, a share price of $183 would be enough to value AAPL at $3 trillion.

To get to these levels from the current intraday share price of $178, Apple stock would need to climb a mere 2.8%. For instance, shares jumped 3% on March 15 alone. Therefore, the stock could be only one good day of solid gains away from the key market cap figure.

The key short-term catalysts

It is a near certainty that Apple will only be able to reach a $3 trillion market cap soon if the broad market continues to find support. After entering correction territory earlier in 2022, the S&P 500 (SPY) has been rebounding strongly.

There are a few factors that could push the entire stock market higher from here:

1. The conflict in Ukraine takes a turn for the better (i.e., it head towards resolution);
2. Crude oil prices continue to dip from the recent highs;
3. Inflation plateaus at around 7% to 9% and begins to moderate;
4. The Fed delivers the rate hikes that the market expects — not much more or less;
5. The US economy continues to show signs of strength;
6. Investors grow more confident that valuations have become attractive.

A few company-specific catalysts could also play a role here. The most important, by far, is calendar Q1 earnings season, which is set to kick off in only a couple of weeks. Apple’s earnings day is likely four to five weeks away.

Keep in mind that Apple will start to face eye-popping comps in the current quarter. For instance, iPhone revenue growth this time last year reached an impressive 65%, for a two-year stacked annualized rate of 24%. Can the Cupertino company top that in fiscal 2022?

Regardless of headline numbers, it will be interesting to hear from CEO Tim Cook and team on a number of topics that could be bullish for AAPL stock. Among them:

1. Are the supply chain constraints starting to ease?
2. How have consumers received the most recent product launches?
3. Is the recent Academy Awards win fueling demand for Apple’s services?

The bad news

Things are definitely starting to look better for Apple stock and its investors. However, the good news (i.e. the recent share price rally) comes alongside bad news for those who chose not to buy AAPL when the price was more attractive, a mere couple of weeks ago.

I have stated repeatedly that buying Apple stock on the dip has historically proven to be the best decision. Unfortunately, the opportunity that stayed on the table for most of 2022 is no longer.

At only about 2% to 3% below all-time highs, investors that buy AAPL now must be comfortable with the idea of jumping in near a historical peak.