Technology investor Gene Munster told CNBC on Thursday that he believes Apple is a reasonable way to reach a market value of $3 trillion in the future.
The iPhone maker became the first U.S. public company to reach a market capitalization of $2 trillion in August. This was a milestone that Munster foreseen in January when he proved that the stock’s trading price had risen by 50%. As of Thursday, Apple’s stock price was about $133, with a market value of nearly $2.3 trillion.
Munster, who was a long-term analyst at Apple Investment Bank Piper Jaffray, said on “Squawk Box”
Munster, who founded the venture capital firm Loup Ventures, said: “It must be based on earnings. This is a powerful argument for Apple’s story.” He said that his forecast is based on Apple’s price-to-earnings ratio, which is the expected price-to-earnings ratio (or 35 ).
“It’s been a year now, but I’m rapidly advancing the dialogue to the middle and the second half of next year, when we will talk about 2022. If the market can maintain this 35 times market value, then-Munster said: “It’s not here. Talking about Amazon-like multiples, I think that path already exists. “
Apple’s current price-to-earnings ratio is close to 41, and the stock has soared about 81% this year. Amazon’s stock price has risen about 76% this year, and its current stock price is about 95 times.
Munster said that one catalyst that can promote Apple’s higher development is the coronavirus pandemic that has stimulated the widespread adoption of remote work.
Munster said: “It is usually thought that this is playing on the iPhone, it is playing on 5G. This is good. This will affect the numbers in a positive way, but this acceleration of digital conversion, I think it is very powerful.” In the next 12 to 24 months, people working everywhere will be armed to buy more Macs, iPads and services.”
Munster also reiterated his belief that as investors reconsider the company, Apple’s business can withstand further expansion. In recent years, the company has been trying to get more revenue from services to expand its hardware sales.
Munster said he thinks Apple can use its hardware business to develop a service, such as buying a Mac through subscription. Munster said: “We believe that will come. For Apple, talking more about cars is a huge opportunity.” He hinted at reports that Apple might produce electric cars in a few years.
He said that in general, he believes that Apple will continue to maintain a strong share price performance in 2021, especially compared to the so-called FAANG brothers. In addition to Apple, the technology company group also includes Amazon, Facebook, Google’s parent company Alphabet and Netflix.
Munster said: “We think the FAANG will break further,” Facebook and Netflix lag behind Apple and Amazon. “I think the performance in 2021 will come from Apple again. It seems deaf and dumb for a company to lead FAANG for three consecutive years, but I think it will actually happen. I think it can reach $200. [per share]. “