Apple (AAPL) stock has been leading the broader S&P 500 higher over the past several weeks, up 13% over the past month alone. Undoubtedly, Apple has enjoyed some considerable multiple expansion, even after pulling back the curtain on quarterly earnings that failed to impress.
Indeed, it's not just about iPhone sales or short-term supply chain woes anymore. Apple has been harshly criticized for its lack of innovation in the past. Still, the Apple we know and love is still one of the most innovative companies out there, even if many of its recent innovations (think AirPods and the Apple Watch) didn't make as much noise upon launch.
Such innovations were eventually widely embraced and shamelessly copied by many other hardware firms following Apple's lead. As Apple leads the charge into the metaverse and other technological shifts, I remain bullish on the stock.
Apple Poised to Unleash a Wave of InnovationInnovation tends to come in waves, at least over at Apple.
Undoubtedly, it's been such a long time since a truly game-changing product was unveiled by Apple. With sights focused on AR, VR, MR (Mixed Reality) and the future of the metaverse, investors appear to be bracing themselves for the launch of what could be Apple's most innovative product in years, if not decades.
According to experts, a pair of mixed-reality goggles could land in the latter half of 2022. Even if COVID supply chain issues push the launch into 2023, there's a lot to get excited about, as Apple looks to make a move beyond the iPhone to change the world forever.
Apple recently acquired a top AR public relations head from Meta Platforms (FB), reinforcing the numerous predictions that an Apple mixed-reality headset will land on schedule.
Meta and Apple Poised to Clash Once Next-Generation Headsets ArriveMeta's Oculus VR headset was a hot seller this holiday season. The Oculus VR app was the most popular app on Apple's App Store during the Christmas season. Indeed, the interest in virtual reality and the metaverse is beginning to pick up traction, though experiences with more affordable VR headsets can still be nauseating for many.
Meta is hard at work on its more advanced Project Cambria headset, while Apple continues work on its first offering. Whether such devices solve issues holding back today's line-up of headsets remains to be seen. Regardless, the stage is set for a very interesting next few years, as Apple and Meta clash for the digital worlds of the future.
Can Apple Stock's Momentum Continue in 2022?It's not a mystery as to why Apple stock is back at all-time highs, with a multiple that continues to swell (currently just north of 32 times trailing earnings).
There's a lot to get excited about in 2022, as it could hold one of its most exciting keynotes since the days of Steve Jobs. Although a mixed-reality headset reveal is partially baked in here, I think investors are underestimating the material impact of Apple's coming headset or goggles. The device could easily fuel the stock's push above the nearly $3 trillion market cap mark in a matter of weeks.
Further, the Apple Car, next-generation services, and a continued health push are brewing in Apple's secretive product pipeline.
Put simply, we could see the most innovative Apple ever over the next five years. For that reason, the stock deserves to trade at the higher end of its historical valuation range.
If anything, AAPL stock may be worth a multiple higher than 30 times earnings, given new innovations and game-changing products could power an unfathomable level of growth that many analysts may have yet to factor into their financial models.
Wall Street's TakeAccording to TipRanks’ consensus analyst rating, AAPL stock comes in as a Strong Buy. Out of 26 analyst ratings, there are 21 Buy recommendations, 4 Hold recommendations, and 1 Sell recommendation.
As for price targets, the average Apple price target is $175.28, implying a downside of 2.31%. Analyst price targets range from a low of $90.00 per share to a high of $210.00 per share.
The Bottom Line on Apple StockIt's tough to gauge just how much of a sales boost coming innovations will give Apple.
Regardless, investors would be wise to hold the stock, even as its valuation grows lofty from a historical standpoint. Indeed, unfathomable growth prospects could accompany a much higher multiple.
Disclosure: Joey Frenette owned shares of Apple at the time of publication.
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