OK, I give up. Apple $1,000?Eighteen months ago I questioned whether Apple stock could keep up its amazing momentum: "Over the past five years the stock has gained an average of 56% a year, an extraordinary achievement," I wrote. "For the shares to rise at a similar rate from here would take it to $1.25 trillion by 2014. Even to grow at a more modest 20% a year would take it to $333 billion—more valuable than Exxon Mobil today and twice the value of Procter & Gamble or Johnson & Johnson. Anything is possible, but that's quite a bet." For Apple investors, I felt, the easiest gains were surely over.
Since then, of course, Apple has made me look like a total idiot. The shares have more than doubled. This week, helped by the news that the iPhone is coming to Verizon, they touched a new all-time high of $344. The company is now valued at $315 billion, more than P&G, J&J or any company other than Exxon Mobil. Far from slowing down, the shares have actually speeded up. I calculate the growth rate works out to an annualized rate of 67%.
As for the underlying business: Sales are booming. Net income soared 70% last year. Competitors have been in disarray. You have to wonder what companies like Nokia and Microsoft are doing. For Apple, each quarter has been a blowout. We will see a new iPad shortly. Earnings next week, if the past is any prologue, will beat expectations. (more)
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