Apple have have a fiercely loyal user base and a strong product which they continue to develop. Whilst some will argue Apple are struggling to come up with enough new features to keep punters interested, others will point to the length of cues outside Apple stores.
A number of analysts feel that Apple, at the current price, is overvalued and may not continue to grow at the same rate. Apple can be a tricky one to predict because brand value is important and the customer loyalty element plays a big part.
What will Apple stock be worth in 5 years time? Long term Apple stock forecast
If the company continues to perform well and global market conditions remain favorable for Apple stock to go up, there’s a strong chance they will improve. UK Inflation will inevitably lead to a hike in interest rates leaving consumers with less disposable income in the near future. This may lead to some people downgrading their phones or going with cheaper models. Despite all Apple is good at, it’s still a very expensive option.
The current 5 year Apple stock forecast is for the price to reach $250.00 per share. This would imply a market capitalization of around $2,500 billion. With net income around $25b on sales of $97b, that would see them priced at 100x profit to market cap. That doesn’t account for any rise in sales or net income, but even if that was included, the stock would still look expensive.
Successful product launches are a key driver of stock prices for technology companies like Apple. With strong rumours indicating that new iPhone and iPad models are on the way, some analysts believe that the stock could rise on the back of those. New products can generate a lot of excitement among consumers and investors alike, so it’s definitely something to keep an eye on. Having said that, many of Apples product launches haven’t managed to move the stock price all that much in recent years so bear that in mind.
The company will need to deliver some really impressive new products and services to move the needle at this point.
Are Apple capable of some ground breaking new product launches? Perhaps their best chance of increases innovation is in the health market with improved functionality of health bands and watches. We’re not far from a world where watches and smart devices could flag serious health issues and if Apple develop technology to reliably save lives, the share price could explode over the next 10 years.
Further innovations to push stock price up
Apple have a number of other products in the pipeline that, if they get right, could cause the stock price to increase.
Apple AR/VR Headset
Apple is reportedly working on an augmented reality headset that could be released as early as 2023. The headset is said to be similar to the Oculus Rift and will use special cameras and sensors to overlay digital information on the real world. This could have a huge impact on gaming, entertainment, education, and many other industries. If Apple can get this product right, it could be a real game-changer.
Apple is also rumored to be working on a self-driving car. This is an area that is attracting a lot of investment at the moment and Apple could be in a strong position to capitalize on this if they can get their technology right. The car market is huge and if Apple can create a successful self-driving car, it could have a major impact on the company’s stock price.
New iPhone models
As always, new iPhone models are likely to be released in the next year or two. These are usually very popular among consumers and generate a lot of excitement.
My personal favourite: the foldable iPhone
There have been ongoing murmurings that Apple is working on a foldable iPhone for release in 2023/2024. This would be a major innovation in the smartphone market and if Apple were to be industry leaders in this area, the share price would improve.
The key to a lot of these products is whether or not they’d be well received by consumers. Apple has a track record of releasing products that people love, but it’s not always guaranteed. They will need to continue to innovate and create products that people want if they want the stock price to go up in the long term.
Apple Stock Splits
Also worth considering that Apple stock has split 5 times since 1980, so each share is worth a fraction of what it was then. A stock split doesn’t necessarily mean the stock price will go up but it does make shares more affordable and therefore more attractive to potential investors. This could have a positive effect on the stock price in the long run.
Stock splits also tend to signal that a company is confident about its future prospects and believe that the stock price has plenty of room to grow. This is generally seen as a positive sign by the markets, so it’s something else to keep an eye on.
Apples stock is also influenced by overall market conditions. If the stock market as a whole is doing well, that usually bodes well for Apple. Conversely, if the market is struggling, it’s likely that Apple’s stock will take a hit as well.
What do you think? I view Apple as a reasonably solid investment over the long term, but for short to medium term investments I think there’s more opportunity in the likes of Tesla (although higher risk) and potential IPOs such as Miso Robotics, SpaceX or Bytedance. Or any of these up and coming 2022 stocks.