In 60 seconds, I will tell you why Apple (AAPL) is going to a $2 trillion market cap by the year 2027.
Because, why talk about Apple at $1 trillion? That's old news, since it's likely to happen within the year.
- Apple's Surprise Earnings Beat Sends Key European Suppliers Spiraling Higher
- Apple Shares Are Booming Overseas as Tech Giant Heads to $800 Billion Valuation
For all intents and purposes, Apple is an undervalued bank. Solving the issue of how to use Apple's exploding cash pile will be one of the biggest tasks of Tim Cook's successor. Expect the company to finally realize it must go on a serious shopping spree to form the tech version of Berkshire Hathaway (BRK.B) . In no way is the market pricing in an Apple that owns both Uber, Tesla (TSLA) and Twitter (TWTR) by the year 2027.
No one has created the gadget that replaces the iPhone in one's everyday life. Alphabet has failed with smart-glasses. Snap (SNAP) embarrassed itself with Spectacles. Amazon (AMZN) failed in smartphones. As long as the iPhone stays central to our daily lives, Apple will keep its flywheel humming.
You have to believe Apple is working on something transformational in the areas of self-driving cars and artificial intelligence. Whatever comes from these currently secret products could prove to be the next standard in how we live our lives.
Those are the basics. Warren Buffett, which owns 133 million shares of Apple, is probably feeling pretty good about all of this fanboy-ism -- as he should. His successor at Berkshire will be quite happy by the year 2027, that much is for sure (provided he/she doesn't unload Apple shares).
Have a lovely day.
What's Smoking Hot on TheStreet
Intel Corp.'s (INTC) past has always depended on the personal computer.
There was the ubiqitous "Intel Inside" campaign of the 1990s, which put the distinctive logo on seemingly every PC (from Dells to MacBooks) and made Intel a household name. The company quickly ascended to become the world's top supplier of PC processors, earning it the name "Chipzilla" for its monster share of the market.
But in just a short period of time, the tech sector has undergone a seismic shift, as the personal computer began to cede its dominance to handheld devices such as the smartphone and tablets. Intel failed to jump on the move to mobile and watched as the PC business began to crumble. For Intel, which saw the bulk of its revenue come from PC chips, it seemed to be a doomsday signal.
Enter Intel CEO Brian Krzanich. Since taking on the role in 2013, Krzanich has engineered a major turnaround of the chipmaker's business. Intel's PC unit has bucked industry-wide declines and continues to grow, even though it's now a smaller share of the company's overall business.
Yours truly came away impressed by Krzanich's plan while sitting in the room listening to Annie Palmer doing her stellar reporting. Wall Street needs to get off this company's neck and give it some credit. Sure, it's no Facebook (FB) with its explosive growth rates, but the market is probably under-estimating Intel's earnings power over the next five years. MobileEye (MBLY) will be very instrumental in surprising all the spreadsheet lovers.
Read the full interview here.
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