THE APPLE INVESTOR: Apple About To Take Over Microsoft's Reign As Most Valuable U.S. Tech Company

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AAPL Up As Traders Mount Rally
A relatively upbeat durable goods report is giving investors a reason to keep buying following yesterday’s late rally. Shares of AAPL are $6 to nearly $252. Future catalysts for the stock include monthly NPD data (Mac / iPod business); international launch of the iPad this Friday; and the launch of the new iPhone (June 7 at the Worldwide Developers Conference where Steve Jobs will be delivering the keynote speech). AAPL trades at 21x estimated fiscal-year 2010 EPS and 11x Enterprise Value / Trailing Twelve Months Free Cash Flow.

The Changing Of The Guard: Apple About To Be More Valuable Than Microsoft (Business Insider)
How many days until Apple’s market cap is bigger than Microsoft’s? Apple is is just knocking on Softie’s door as the iPhone maker is innovating light years past Redmond’s sleeping giant. Henry Blodget at Business Insider points out that in terms of the actual business value, Apple is inching closer as well. Specifically, Apple’s business (based on enterprise value) is now worth about $182 billion, while Microsoft’s is worth approximately $197 billion. To put this into perspective, a decade ago, Apple had a market cap of $16 billion and Microsoft had a market cap of $556 billion. Meaning that Apple has gained about $210 billion of market value and Microsoft has lost about $325 billion. The torch is about to be passed.

Wall Street Sees Upside In June iPhone and iPad June Estimates (Fortune)
Analysts are out making obvious observations. And who are they kidding? Apple beats every time, regardless.

  • Gene Munster at Piper Jaffray believes that given the widely anticipated launch of the new and significantly redesigned iPhone, his current June quarter unit estimate of 8.5 million could prove to be conservative. Munster also believes there is significant upside to his iPad estimate of 1.3 million units as demand continues to be strong. He maintains his Overweight rating and price-target of $323.
  • J.P. Morgan analyst Mark Moskowitz met with Apple and the company “continues to beam” with customer response to the iPad. It is too early to assess whether another halo effect is in the making but there was increasing interest in the small- to mid-sized business market. This incremental vertical is value-add, given its higher profit profile. The Apple retail store expansion continues to be steady and focused on International markets. He reiterates his Overweight rating and $316 price-target.
  • Sterne, Agee & Leach analyst Vijay Rakesh believes that production of iPad computers could ramp to 2.5 million per month by the September quarter to support the device’s international launch and back-to-school shopping, based on channel checks to memory-chip makers. He believes most of the manufacturing bottlenecks are now solved in the iPad supply chain.

In True Walmart Fashion, The Retail Giant Cuts The iPhone 3GS Tag By $100 (CNN)
Walmart has slashed the price of the 16 GB iPhone 3GS to $97 from $197. The price cut is earlier than some analysts anticipated as the new iPhone doesn’t launch until June (available late June or early July). Leaked details of the new phone last month may be the reason; to entice those that would have purchased ahead of the launch to do so given the cost savings. Jay Yarow at Business Insider noted that Apple is probably killing the $99 iPhone 3G. Makes sense that the company would replace the $99 iPhone 3G with a $99 iPhone 3GS, which has more power, memory, storage, and faster Internet access.

Apple Could Get Busted By Over Blocking Exclusive Music Content To Amazon (The New York Times)
Apple is not immune to the The U.S. Justice Department. The governing body is reportedly looking into how the media giant has used its dominant position in the digital music business to block music labels from giving exclusive access to content to Amazon. The inquire is in early stages according to sources. NPD Group estimates that Apple has 69% of the U.S. online music market and 27% of the overall U.S. music market.

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