Why Apple Inc.’s Market Capitalization Could Hit $1.5 Trillion
Steve Jobs reinvented Apple Inc. (NASDAQ:AAPL) with the iPod and iPhone, making Apple stock the hottest commodity on the planet. Now Apple looks to be morphing once again and anyone holding AAPL stock will reap the benefits.
Apple was very close to the end of its life when Steve Jobs was brought back. Jobs resurrected AAPL stock by refocusing Apple onto a core line of products; namely, mobile devices. Jobs demanded artistic and functional elegance from Apple and it yielded massive profits for shareholders.
As a direct result of Steve Jobs, Apple became the largest company on the planet. Many analysts thought the value of AAPL stock would crater after Jobs passed away, thinking that Apple would lose its ability to give customers what they never knew they wanted.
But now we’re seeing that Apple is honouring the legacy of Steve Jobs. As the smartphone market shows signs of oversaturation, the company is considering driverless technology as the next frontier for Apple stock.
Could AAPL Stock Surge on Driverless Tech?
A key feature that makes Apple stock attractive is the gargantuan level of cash stored in overseas bank accounts. Apple has cash reserves of roughly $180 billion (that’s billion with a “b”) sitting on the sidelines, waiting to be used.
Driverless technology could be the company’s ticket to the future. Sooner or later, when no corner of the smartphone market is left untapped, investors will turn bearish on AAPL stock. If I can see that endgame for Apple stock, so can the geniuses at Apple headquarters.
In order for AAPL to prosper for the next few decades, it needs an expansion plan that mirrors the brilliance of Steve Jobs. And driverless technology is certainly it.
Back in October, Apple hired Jonathan Cohen, an artificial intelligence expert from Nvidia Corp. A lot of AAPL stock watchers view this as a sure sign that Apple is planning on building a self-driving car. (Source: “Apple Hires an Artificial Intelligence Expert From Nvidia. Is He Going to Work on Self-Driving Cars?” Re/Code, October 23, 2015.)
After all, Cohen is widely respected within the industry as a driverless tech expert. It’s not unheard of for established giants like Apple to break out of their traditional businesses and try something new.
In fact, the greatest companies are built on moonshot ideas. Google Inc., now Alphabet Inc., was a search engine company that decided to build software for smartphones and contemplate stratospheric balloons that could bestow Wi-Fi on the world.
Likewise, Apple could set up huge gains for its stock by transforming itself. The engineering talent and design principles embedded within Apple’s culture are astonishingly similar to the best carmakers.
How AAPL Stock Can Win the Future
Building a strong team of experienced automobile engineers is essential to Apple’s success in building a self-driving car. But rather than hire that team straight away, it makes sense for Apple to first hone their driverless technology.
That’s what seems to be happening right now. Cohen only disclosed his switch to Apple on LinkedIn, meaning that the shift was supposed to be subtle. However, all factors for AAPL stock are closely monitored by the horde of Apple stockholders.
Considering that the net value of Apple stock is pretty close to $700 billion right now, AAPL stock could nearly double by stepping into the automobile market. We could see Apple’s market valuation hit $1.0 trillion in the near term, with scope for it to hit $1.5 trillion in the medium- to long-term.