Could Apple Stock Hit a $250.00?
Despite becoming the most successful company on the planet, Apple Inc. (NASDAQ:AAPL) still has to prove that the stock will continue to grow. AAPL stock took some flack after its quarterly earnings became public, but here’s why the stock is in great shape to go as high as $250.00.
Apple stock has been one of the most lucrative investments over the last decade. We’ve seen the stock appreciate by over 1,087.93% in the last ten years, and there isn’t enough evidence to suggest that it will spontaneously combust.
But there are more reasons to be bullish on AAPL stock than its strong quarterly earnings. We’re seeing a movement towards wearable fitness technology, with lots of capital flowing to Fitbit Inc. (NYSE:FIT) showing us that investors are confident in that sector.
That being said, the dynamics of wearable technology are still playing out. For my part, I think Apple will decimate Fitbit and poach all the capital that investors have for a bullish bet on wearable fitness tech.
Also, AAPL stock could get a big bump from more buybacks. Carl Icahn, a famous activist investor, is working on a political solution so that Apple can bring back their overseas cash reserves without paying the full tax rate. (Source: “Carl Icahn creates $150 million Super PAC advocating enormous tax cut for Carl Icahn,” Vox.com, October 21, 2015.)
AAPL Stock Could Soar on These Tailwinds
Apple is famous for keeping a mountain of cash in Ireland, where it pays almost no tax. And when I say a mountain of cash, I mean close to $180 billion. If even a portion of that was used to repurchase Apple stock, we could see the stock jump in value.
Carl Icahn funded a super PAC with $150 million to lobby for a tax holiday. If Icahn is successful, Apple would be able to bring overseas cash back to the U.S. at a reduced tax rate. The benefits for Apple are massive.
Icahn owns a significant chunk of AAPL stock. His portion of Apple’s cash reserves amounts to roughly $900 million. Under current tax law, Apple would owe $315 million to the U.S. government. But if Icahn gets the rate reduced to eight percent, Apple would save $243 million in taxes.
Icahn’s Apple stock would shoot through the roof.
Apple Stock is Poised for Huge Growth
And now back to the wearable tech segment. This just seems like a no-brainer to me.
Of course, Apple will come out on top in this fight; it almost seems ridiculous to even debate it. On one hand, you have Fitbit, a niche wearable fitness tech firm with competitive edge to keep out competition. Their only advantage was being early into the industry.
And on the other hand, you have Apple, which can tie in its wearable fitness technology to its smartphones. Sure, Fitbit could compete on price. But how long will that strategy last? Apple stock could surge if the company produces a lower-priced range of wearable fitness gear, because the products would sync with iPhones, iPads, and even Apple TV.
It simply isn’t credible that people will continue to pay for wearable fitness technology that doesn’t do anything else. Once the industry matures slightly, and its direction becomes clearer, Apple is sure to emerge as the winner.