Any student of economics will confirm that an object or service of a group is only worth whatever the market is willing to pay for it at the time. Following a positiveanalytics report of its shares, Apple’s rose over 3 percent in the midday trading to record a high of $153.7. The market value of the firm rose above $800 billion at one point for a brief moment before slowly decreasing below the milestone to close at $153 a share which is up 2.7 percent.
iPhone 8 expectations fuel rising value
The anticipation surrounding the firm is reaching a frenzied level at this time as some factors are pushing investing parties to higher levels. The iPhone 8 for one is widely expected to launch later during the year and is predicted to start a new trend of upgrades as seen in the previous years to an exponential level, resulting in a new wave of profit for Apple.
The iPhone maker reported mixed earnings for the quarter this past week and sold fewer products than expected though at high prices. CEO Tim Cook attributed part ofthe slowdown to the fact some consumers are holding out because of the iPhone 8 which is expected to be revealed in early September. Wall Street analysts are also in agreement as they have upped the 12 month price target for the millionth time thus far in May. Brian White, an analyst for Drexel Hamilton, released Apple’s highest price target on Monday which was at $202. This would insinuate a market value of $1 trillion for Apple. Now, the number may be intimidating, but Apple is almost there in the view of most investors who consider the future earnings and cash as much as the current product line up.
Unrelated reasons for Apple market value
There are wider economic reasons not in any way related to the product line-up that are in favor of the company. For one, the firm has some $250 billion in revenue which is being held in overseas accounts. They are kept there because bringing them home would impose a 35% taxation. The president though has at one time hinted at the possibility of a one-time tax break which would encourage like-minded firms in the same position as Apple to bring their revenue back to America. This break would be within the neighborhood of 10% and would allow Apple to return its revenue to the United States, either using it to invest or decide to return it to shareholders. Both options would be a favorable turnout for investors.
In spite of the astoundingly high market capitalization, it’s soon to be revealed, iPhone 8 and the repatriation of foreign revenue on the horizon may fuel an uptick in the company’s share value. Suddenly, that trillion dollar market value does not seem too far-fetched. Share value is also being buoyed by investor moguls who are adding to investor confidence such as Warren Buffet who called the iPhone a “very very very valuable product”. It seems the planets are aligning in every sector of the financial industry for Apple from the executive branch to Wall Street as well as investing titans, all of whom have massive leverage on the consumer market.