Could Apple become a $4T stock in the next year? At least one analyst says yes

Published Mon, Jul 8 20244:02 PM EDT

So much for the $3 trillion club: Investors and Wall Street analysts alike are now talking about when Apple might top a $4 trillion stock market value. Wedbush on Monday reiterated its $275 price target on Apple shares for the next 12 months, citing "more signs of iPhone stabilization" in China and the potential for a global iPhone 16 upgrade cycle driven by new artificial intelligence features. That target, based on Apple's current share count, would take the tech giant's market value above $4 trillion. For those keeping score, Apple closed above a $3 trillion market value just over one year ago. It was joined by fellow portfolio names Microsoft in January and Nvidia last month. "We have seen one [name] become the great stock of this period," Jim Cramer said Monday. "It's Apple." He described the iPhone as the "greatest consumer product of all time," adding Apple's stellar fundamentals and growth prospects will continue to carry shares higher. Apple and Nvidia are Jim's only "own, don't trade" stocks. AAPL YTD mountain Apple (AAPL) year-to-date performance Apple shares reached an all-time intraday high to start the week, continuing last week's terrific start to the second half of 2024. Shares gained more than 7% last week, compared to the S & P 500's nearly 2% advance, and are now up 18% for the year. This marks a dramatic turnaround for Apple. Slower iPhone sales in China, which account for nearly 20% of Apple's overall revenue, dogged the stock into April. But it found its footing and soared nearly 6% on May 3, the day after quarterly results were much better than feared. Shares rose another 7% on June 11, the day after management unveiled the company's long-awaited generative AI initiative, Apple Intelligence. The announcements at Apple's annual Worldwide Developers Conference (WWDC) included an overhaul of Siri, an integration of OpenAI's ChatGPT, and a suite of other new features. The new features are only compatible with last year's iPhone 15 Pro and newer models. Apple's buzzy AI tools should increase iPhone sales, which make up roughly half of the company's overall revenue, as users trade up for the latest more innovative models. "Our bullish stance on Apple looking ahead is based on our belief and work in the field that … pent up demand around an AI-driven super cycle beginning with iPhone 16 this Fall as 270 million iPhones have not upgraded their iPhone in over 4 years based on our estimates," the Wedbush analysts, led by Dan Ives, wrote in Monday's note. They have a buy-equivalent rating on shares. Apple's high-margin services business , which includes App Store sales and subscriptions, will benefit from AI as well. Services have been a driver of Apple's revenue growth in recent quarters. Wedbush analysts argued that more developers will build hundreds of AI-driven apps within the next year that will be featured in the App Store, giving Apple a percentage of sales from each transaction. "The OpenAI partnership creates the highway for developers around the globe to focus on iOS 18 and this, in turn, will create a myriad of monetization opportunities for Cook & Co., over the coming years that the Street is still not fully appreciating," the analysts said. "To put some numbers around the opportunity: we estimate this could result in incremental Services high margin growth annually of $10 billion for Apple as this all kicks in and will be the start of a new multi-pronged AI revenue stream that is both hardware and software-driven," Wedbush said. Jim has long touted Apple's services business as well. During the Club's June Monthly Meeting, he said that the division "will become more and more important, to the point, ultimately, where the Apple iPhones and other devices will be thought of as the Gillette razors and the service revenues will be the incredibly high margin, totally proprietary, blades." (Jim Cramer's Charitable Trust is long AAPL, NVDA, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

The Apple logo is displayed at the Nasdaq MarketSite just before the opening bell in New York on Thursday, Aug. 25, 2011.

Scott Eells | Bloomberg | Getty Images

So much for the $3 trillion club: Investors and Wall Street analysts alike are now talking about when Apple might top a $4 trillion stock market value.