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Will WWDC Bring the Lift Apple (AAPL) Needs to Pounce the First Trillion Dollar Market Cap?

BTIG's Walter Piecyk anticipates the company is just $7 per share shy of reaching $1 trillion in market cap- today's hot race among tech giants.


All eyes from developers to tech enthusiasts are on Apple Inc. (NASDAQ:AAPL) and its highly anticipated annual event the Worldwide Developers Conference, rumbling today in San Jose, California. From device operating system upgrades to potential fresh hardware and software endeavor reveals, one bull sees a market cap drawing near a trillion dollars.

BTIG analyst Walter Piecyk muses as to whether the WWDC could be the lever that vaults the tech titan up to a trillion dollar market cap. Assessing that based on Friday’s close of $190 and 4,068 in share count for the second fiscal quarter, the market cap had already hit $964 billion. This is a stock that just needs to hit an extra $7 per share, or a 3.7% jump to grab the trillion-dollar mark, wagers the analyst on back of the second fiscal quarter share count.

“However, we expect Apple to repurchase $20 billion of stock in FQ3 (ending Jun-18) at an average price of $180 per share. That means Apple’s stock would need to rise $12 per share (+6.3%) to $202 to clear the $1 trillion market cap milestone. Unfortunately, Apple has not typically demonstrated that type of performance following a WWDC, as the table below shows. Stock typically closes down on day of WWDC Similar to prior years, Apple stock has once again traded up in the month leading up to WWDC and is not that far off the average increase over the past 11 years. This year, the stock is up 3.5% vs the 4.1% average over the past 11 years and it’s also up 12.5% since reporting FQ3 guidance that alleviated some fears fanned by our competitors on iPhone shipments. […] Notably, Apple stock has never closed up on the actual first day of WWDC, but has closed down 1.2% on average. Apple stock has also typically sold off the day after WWDC by a roughly similar amount,” writes Piecyk.

At the WWDC, the analyst anticipates the tech titan will release the following: 1) a forthcoming version of the big AAPL machine’s operating systems, from iOS 12 to macOS 10.14 to tvOS 12 to watchOS 5; 2)iOS apps taking a leap to Mac with cross platform features; 3) Bloomberg has rumored iOS Digital Health capabilities of the likes of Google’s just-released feature for Android that may assist in scaling back phone usage; 4) augmented reality multiplayer video games geared for iOS systems; 5) an ‘iPhone SE 2’ refresh on the original iPhone SE; 6) brand new Mac Pro; 7) new AirPods; 8) an ‘AirPower’ wireless charging mat.

Therefore, the analyst rates AAPL stock a Buy with a $207 price target, which implies a close to 8% upside from current levels. (To watch Piecyk’s track record, click here)

TipRanks indicates caution has Wall Street divided between the bulls and the sidelined when it comes to consensus sell-side analyst opinion. Out of 28 analysts polled in the last 3 months, 15 are bullish on AAPL stock while 13 remain sidelined. With a slight return potential of nearly 2%, the stock’s consensus target price hovers just above current trading levels at $194.84.