So the question is, where to next?
Topeka Capital Markets analyst Brian White, who has the highest price target for Apple of any analyst on the Street - $1,111 - this morning was out pounding the table on Apple shares, which he thinks remain a raging bargain. Sounds contradictory to imagine that the company with the largest valuation of any in history is cheap, but White thinks so, and I think he makes a persuasive case.
White notes that back in June, there was hand-wringing on the Street about the ability of a public company to sustain a market cap above $500 billion. At that time - and again this morning - he asserts that investors should be thinking about Apple's market cap in terms of trillions, not billions.
White notes that other companies which once surpassed the $500 billion level - Cisco, Exxon-Mobil, General Electric, Intel and Microsoft - all traded at premium valuations when they reached those lofty levels. But he notes that ex-cash, Apple trades for just 10.7x estimated 2013 profits. On a combined basis, those five other companies at their peaks traded at over 60x forward earnings. For the tech names on the list, they peaked out on average at over 80x.
He also sees plenty of room for market share growth at Apple - while the other giant market caps came while companies were already showing market dominance. "Microsoft held over 90% market share for PC operating systems at the peak cap, while Intel had over 80% of the PC processor market and Cisco had over 70% share in the networking market," he writes. "On the other hand, IDC estimates Apple held just 4.7% of the PC market in Q1 and 6.4% share in the mobile phone market in Q2, while Apple's 68% Q2 share of the media tablet market speaks to its invention of the category."
White adds with the expected boost from the pending laumches pof iPhone 5, iPad and Apple TV, and the potential for a distribution deal with China Mobile, the company "is on a path to generate the highest annual net income of any publicly traded company ever" by at least calendar 2013.
By the way: if Apple shares hit White's target, it will come with a market cap of $1.04 trillion.
Apple this morning is succumbing to a bout of profit taking, with the shares off $8.59, or 1.3%, to $656.56.
