According to Piper Jaffray analyst Gene Munster, Apple's stock could reach $1,000 by 2014, making it the world's first trillion dollar company. The consumer electronics giant is currently worth around $600 billion today, and Munster believes the next $400 will come from Apple capturing a growing market cap from competitors.
"We believe there will be enough value over the next two plus years for Apple to add another $400 billion in market cap from a combination of growth in dollars invested in tech and continued shift from major Apple competitors. We believe dollars invested in US technology companies will increase 5% year-over-year on average for the next three years. By comparison, dollars invested in US tech companies were up 9% year-over-year in 2011. Therefore, the tech sector will add $390 billion in market cap through 2014. We assume Apple could capture half of this market cap (from 85% in the 4 years prior)," said Munster.
"The companies we consider to be the 10 most relevant competitors to Apple (Samsung, HTC, RIMM, Nokia, Sony, Dell, HP, Microsoft, Intel, and Google) represent nearly $1 trillion in market cap today. We believe 20% of that value, or $200 billion could shift to Apple through 2014. Thus there is potential for Apple to repeat history and add another $400 billion to its market cap. At a $1,000 share price (roughly $1 trillion in market cap) Apple would represent 26% of the total US tech market cap from 17% today."
Munster believes Apple will control 60 percent of the tablet market and around 33 percent of the smartphone market through 2015. His estimates are listed in the chart below:
"Fundamentally, we believe shares can reach $1,000 based on our belief Apple will continue to win in global mobile devices," said Munster.
[Via Business Insider]