The Most Important Apple Analyst On Wall Street Says The Stock Is Going To $1,000

tim cook apple

Photo: Photo by Kevork Djansezian/Getty Images

Apple analyst Gene Munster of Piper Jaffray has finally come out and said it: He thinks Apple’s stock will be at $1,000 in 2014, making it the world’s first trillion dollar company.”Fundamentally, we believe shares can reach $1,000 based on our belief Apple will continue to win in global mobile devices,” says Munster in a note this morning. He also says, “we believe the real story is earnings growth.”

Apple’s market cap today is $600 billion. The next $400 billion will come from investors abandoning Apple’s rivals, says Munster.

Here’s an explanation:

We believe there will be enough value over the next two plus years for Apple to add another $400 billion in market cap from a combination of growth in dollars invested in tech and continued shift from major Apple competitors. First, we believe dollars invested in US technology companies will increase ~5% y/y on average for the next three years (CY12-CY14). By comparison, dollars invested in US tech companies were up 9% y/y in 2011. Therefore, the tech sector will add ~$390 billion in market cap through 2014. We assume Apple could capture half of this market cap (from 85% in the 4 years prior). Second, the companies we consider to be the 10 most relevant competitors to Apple (Samsung, HTC, RIMM, NOK, SNE, DELL, HP, MSFT, INTC, GOOG) represent nearly $1 trillion in market cap today. We believe 20% of that value, or ~$200 billion could shift to Apple through 2014. Thus there is potential for Apple to repeat history and add another $400 billion to its market cap. At a $1,000 share price (roughly $1 trillion in market cap) Apple would represent 26% of the total US tech market cap from 17% today.

On a more fundamental level, he thinks Apple controls 60% of the tablet market through 2015, and sells a boatload of iPhones in the next few years. Below are his assumptions of iPhone and iPad sales that drive Apple to a trillion.

Piper Jaffray iPhone and iPad estimates

Photo: Piper Jaffray

This isn’t the first time Munster has talked about Apple going to $1,000. He (basically) told us it would be at $1,000 in 2010. Watch his explanation here >

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.

Tagged In

apple sai-us