“M.G.”, writing for The Economist, regarding Apple’s breaking of Microsoft’s record for nominal (although not inflation-adjusted) market capitalization:
Yet some bulls think that the stellar rise of the firm’s share
price is far from over. Jefferies, an investment bank, believes
Apple’s shares could hit $900 each and some investors reckon the
price could go even higher, rasing [sic] the possibility that
Apple could become the world’s first public company with a
trillion dollar market capitalisation. This smacks of hype rather
than hard-headed analysis. Apple still has plenty of room to grow,
but even the brightest corporate stars cannot sparkle forever.
And that’s how the piece ends. Seems awfully facile for The Economist. No one’s arguing that Apple’s “corporate star” will sparkle forever. The question is simply whether Apple’s market cap, now at $665 billion, can grow half again. Given the growth trajectories for both iPhone and iPad sales and the company’s remarkable profit margins, I’d say the onus is on the Apple bears to explain why the company has reached or even neared its peak.
The hardest-headed analysis I’ve seen suggests the opposite: that Apple hasn’t yet neared its peak.
★ Wednesday, 22 August 2012