Apple
AAPL
briefly crossed $3 trillion in market cap in intraday trading on Jan 3, becoming the first publicly traded U.S. company to hit this much-coveted milestone. Shares of the iPhone-maker increased 2.5% to finally close at $182.01, with total market capitalization at $2.986 trillion.
Apple reached $1 trillion in market capitalization in mid-2018 and achieved a $2-trillion valuation in August 2020, becoming the first U.S. company to achieve that milestone.
Apple’s robust outperformance can be attributed to strong demand for its iPhone. The company’s 5G-supported iPhone has witnessed robust demand despite coronavirus-induced supply chain headwinds and short supply of chips.
Apple has benefited from the coronavirus-induced work-from-home and online-learning waves, which drove demand for iPad and Mac personal computers.
Since March 2020, when coronavirus first sent the world into lockdown, Apple’s shares have outperformed its MAMAA peers that include
Alphabet
GOOGL
,
Microsoft
MSFT
,
Amazon
AMZN
and
Meta Platforms
FB
. The term MAMAA has been
coined by Mad Money’s Jim Cramer in replacement of FAANG
after Facebook changed its name to Meta Platforms.
Image Source: Zacks Investment Research
Apple shares have returned 166.4% since Feb 28, 2020 in contrast to Alphabet’s, Microsoft’s, Amazon’s and Meta Platform’s returns of 116.6%, 106.7%, 81% and 75.9%, respectively.
Apple shares have also outperformed the Zacks
Computer- Mini Computers
industry.
Prospects Remain Robust
Apple’s 2022 prospects remain strong thanks to a continuous iPhone upgrade cycle and strong growth of the Services business.
According to latest Strategy Analytics data cited by 9TO5 Mac,
Apple is dominating the 5G smartphone space
in terms of global 5G shipment share, thanks to strong demand for iPhone 13.
This Zacks Rank #2 (Buy) company is now speculated to add a 48 mega-pixel lens for its upcoming iPhone in 2022 and periscope lens in 2023, according to Apple analyst Ming-Chi Kuo. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Apple is now expected to manufacture 259 million iPhones in 2022, up 9% year over year, per estimates by Mizuho Securities analyst Yasuo Nakane.
Other notable expectations are a new 27-inch iMac powered by Apple Silicon, a redesigned MacBook Air, a new generation of iPad Pro and Apple Watch that promises a new design, body temperature sensor, as well as new additional health and fitness tracking.
Apple’s augmented-reality headset is the most anticipated product in 2022. The iPhone-maker is now rumored to launch its first AR headset in the second half of 2022. Per 9TO5 Mac, which cited a Digitimes report, the rumored AR headset has completed the second phase of prototype testing and is expected to be in
production in the second quarter of 2022
. This high-end commercial-purpose device is expected to cost more than $2000.
Meanwhile, renowned analyst Ming-Chi Kuo expects Apple to release a new helmet-type headset with Micro-OLED displays and AR/VR capabilities in 2022. This headset is expected to comprise of 15 camera modules, of which eight will be dedicated for AR video experiences.
AR glasses from Apple, once available, will intensify competition for the likes of Meta and Alphabet division Google. Meta recently announced its Ray-Ban Stories smart glasses, developed in collaboration with EssilorLuxottica.
Apple’s Services and Wearables businesses are expected to drive top-line growth in fiscal 2022 and beyond. Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow.
Apple’s endeavors to open up its ecosystem through partnerships with the likes of Samsung and Amazon are positive for the Services segment.
Apple currently has more than 745 million paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers from around the world, helping the company offer appealing new apps that drive App Store traffic.
Increasing Regulation is a Concern
However, Apple, along with its big tech peers like Google, is facing regulatory headwinds.
Both Google and Apple continue to face strict regulatory pressure against their unfair trade practices with small local businesses. Allegedly, both companies have exploited small app makers by charging a significant chunk of their sales and discarding the apps anytime.
Apart from this, Apple is accused of abusing its control over its mobile devices, harming competition and inflating prices via iPhone app sales. Apple is now facing regulatory issues in the U.S. and India over its App store practices.
In India, Apple will face an investigation by the Competition Commission of India (“CCI”), the chief national competition regulator in India, over allegations of violating certain antitrust laws. CCI ordered the probe following a non-profit organization, Together We Fight Society’s, complaint against the tech giant’s App Store payment rules.
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