Tim CookSource: Apple

What you need to know

  • One analyst believes 5G "complexity and hype" could propel Apple's share price to $375 this year.
  • D.A. Davidson analyst Tom Forte thinks that AAPL could grow by another 20% this year.
  • He believes Apple can exploit 5G for growth in both Fall 2020 and 2021.

This article has been updated to include the further predictions of Wedbush analyst Dan Ives, who's $400 share prediction is even more bullish than that of Tom Forte!

D.A. Davidson analyst Tom Forte believes that 5G could propel Apple's share price to $375, in the most bullish stance on Apple's stock to date.

As reported by Business Insider:

Apple has a new biggest bull on Wall Street after research firm D.A. Davidson boosted its price target to the highest among analysts. The tech giant's stock is poised to leap 20% over the next year to $375 per share, analyst Tom Forte said in a Monday note. Apple currently trades at roughly $313 per share, just above Davidson's previous target of $310. Though the company's iPhone no longer accounts for half of its quarterly revenue, the research firm expects 5G to provide a potent shot-in-the-arm for the flagship product. Apple's upcoming devices will drive several years of growth after a "challenging" year for the iPhone, Forte wrote.

In his note he said:

"There is enough complexity and hype when it comes to 5G that we believe Apple can exploit this multi-year opportunity and generate positive smartphone unit growth for, at least, its next two product launches - fall of 2020 and fall of 2021."

Most recently, reports from supply chain insider Ming-Chi Kuo seemed to suggest that Apple would indeed adopt mmWave 5G in its 2020 iPhones. If Forte's prediction is to be believed, that could make Apple's stock jump another 20% or so in 2020.

Elsewhere, Wedbush analyst Dan Ives believes that Apple's stock could reach $400 this year, an even more optimistic prediction than that of Tom Forte. As reported by Apple Insider:

In a research note to investors seen by AppleInsider Wedbush analyst Daniel Ives is now the biggest bull on Apple stock price. Between AirPods, Apple's continuing shift to Services, iPhone 11 strength, and the power of the 5g "iPhone 12," Wedbush sees boom times ahead for Apple, with a 2020 year-end stock price of $400 per share, and a $2 trillion valuation by the end of 2021.

According to the report Ives said:

We view only the first part of this massive upgrade opportunity leading to a transformational 5G 'super cycle' with 200 million to 220 million iPhone units now the new line in sand for demand based on our recent Asia supply chain checks... "Coupling this dynamic with a metamorphosis-like valuation re-rating by the Street around the company's $50 billion+ annual services revenue stream is the 1-2 punch to how we ultimately see a stock in the bull case $400 valuation by year-end."

Apple is coming off the back of a record-breaking 2019 in which it's value grew by 86% despite conservative iPhone sales. Just 14 days into 2020, AAPL last closed at $316, having started the year at $300. Whilst it's unlikely that Apple will sustain that kind of growth all year, the stunning momentum of AAPL shares shows no sign of slowing down.

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Forte described the iPhone's slowing growth in 2019 as a blessing-in-disguise, suggesting that the maturing of the smartphone market pushed Apple to look towards other revenue drivers, such as its wearables and services like Apple Music to sustain its growth. Apple recently hailed a "landmark year" for its services. With Apple posting records left, right, and center based on fairly modest iPhone sales, one can only imagine how it might excel with strong iPhone performance underpinning 2020.

Previous reports had suggested that investors had maybe missed the boat on Apple's bumper 2019 performance, perhaps there's a bit more growth to be squeezed out of it yet.

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