How long will it take for Apple to reach a market cap of $10T?

[ghanwani]

Apple's market cap is now close to $2T. How long will it take to get to $10T?

Keep in mind that the fed is in "whatever it takes" mode until the economy "recovers", and that, right now, is being put at around 2024.

(Keeping the poll simple and uncomplicated, just like everything Apple does.)

 

[AustinIllini]

Hard to know. There are a ton of political changes that are going to happen between now and $10T. ">3 years" needs to be an option.

They would probably need a serious new product. I would argue the product would have to be more successful than Apple Watch.

 

[ghanwani]

I can easily see AAPL P/E going to 100 because of all the money being pumped in via fed and congress and bond rates going lower. That makes it $6T. Then, because of low rates AAPL can take on even more debt and buy back more stock to grow its earnings. India remains a huge untapped market and having more affordable phones will help. Arm based Macs help with margins. Apple TV just starting to take off. I see huge tailwinds so $10T within 3 years is almost a given, it’s just a question of how soon.

It took decades to get to $1T, but only about 2 years to add the next $1T.

 

[ghanwani]

Things are getting exciting. Apple about to hit $2T and is up 1/3rd of $1T in 1 week. If it maintains this type of momentum, it could get to $4T by the end of this year, and probably $16T by the end of next year.

 

[MacGizmo]

I highly doubt it'll ever go over 3T, let alone 10. But who knows... if they actually ship a self-driving car, and a few other products nobody has even though of yet, I suppose anything is possible.

 

[ghanwani]

We hit a minor bump today. Hope it clears up tomorrow.

 

[ghanwani]

Just $8T more to go!

 

[ghanwani]

Two more trading days (since $2T) and it has already added $100B in market cap. I think we EASILY get to $10T in 2 years.

 

[ghanwani]

Looks like we have hit a bit of a speed bump. We need some fiscal and monetary stimulus!

 

[ghanwani]

I highly doubt it'll ever go over 3T, let alone 10. But who knows... if they actually ship a self-driving car, and a few other products nobody has even though of yet, I suppose anything is possible.

Looks like today might be the day it hits $3T.

It took 2 years to get from $1T to $2T and only 18 months to go from $2T to $3T.

My guess is we hit $10T in < 5 years, a bit longer than I originally predicted.

Once it hits $3T, I expect it to rip higher as it breaks through that glass ceiling.

 

[KaliYoni]

How long will it take to get to $10T?

Given AAPL is a major part of pretty much every US and global index and consequently has its market cap primarily driven by institutional holders, AAPL's valuation level is going to be primarily driven by fundamental analysis factors. In other words, index makers, such as MSCI, and buy-side fund managers, like Fidelity, use financial models, not momentum or sentiment indicators, to make portfolio decisions. This means measures such as revenue, interest rates, debt, and costs will play a big role.

If you're interested, some investment bank analysts make their models available. Try using your favorite search engine or if you are a client of a non-discount brokerage, ask your rep.

 

[pshufd]

We've been in a secular bull market since March 2009. There are bear markets too. Just a reminder that the NASDAQ Composite dropped 80% from 2000 to 2002.

 

[pshufd]

Looks like we have hit a bit of a speed bump. We need some fiscal and monetary stimulus!

We're headed in the opposite direction. One of the big houses said that the Fed may do four or more rate hikes this year and drain faster than expected. We are constrained in Fiscal policy as well do to Congressional gridlock. I actually expect that we will go into deflation later this year.

 

[ghanwani]

We've been in a secular bull market since March 2009. There are bear markets too. Just a reminder that the NASDAQ Composite dropped 80% from 2000 to 2002.

At that time pension funds held a lot of bonds. Now they are leveraged in stocks. Fed will not let the market fall.

 

[pshufd]

At that time pension funds held a lot of bonds. Now they are leveraged in stocks. Fed will not let the market fall.

The Fed usually doesn't have a choice. They can let it fall smaller amounts or they can let it collapse when they can't support it any longer.

Failed pensions go into the Pension Benefit Guarantee Corporation.

The problem with supporting the markets is moral hazard. Participants placed more leveraged bets betting that the Fed will let them continue to do so. And that becomes very dangerous.

 

[ghanwani]

The Fed usually doesn't have a choice. They can let it fall smaller amounts or they can let it collapse when they can't support it any longer.

Failed pensions go into the Pension Benefit Guarantee Corporation.

The problem with supporting the markets is moral hazard. Participants placed more leveraged bets betting that the Fed will let them continue to do so. And that becomes very dangerous.

It's already done at this time. The fed has forced all the pension funds to leverage by destroying the fixed income market. They will change the rules to allow the fed to buy stocks if they have to.

 

[pshufd]

It's already done at this time. The fed has forced all the pension funds to leverage by destroying the fixed income market. They will change the rules to allow the fed to buy stocks if they have to.

I just had a look at TLT and it looks fine to me.

This is the time to start scaling into bonds.

What you're talking about is what has happened to Japan over the past 40 years and their stock market is still way off the peak.

But what I said remains true, stocks can go down.

 

[ghanwani]

I just had a look at TLT and it looks fine to me.

So you buy a 10 year bond and lose 5+% per year in purchasing power?

 

[nsayer]

Here's the thing.

Most of Apple's market cap growth isn't so much Apple becoming more valuable as much as it is the dollar becoming less valuable. In 1975 dollars, $3 trillion is $580 billion. Impressive, to be sure, but fully 80% of that three trillion is inflation.

 

[KaliYoni]

This thread has taken a turn that ties into what an analyst I follow has been talking about for the last several months:

On My Radar: Tough Love in Fed Minutes - CMG

January 7, 2022 By Steve Blumenthal “An optimist understands that life can be a bumpy road, but at least it is leading somewhere. They learn from mistakes and failures and are not afraid to fail again.” – Harvey McKay, seven-time New York Times best-selling author of “Swim With The Sharks...

www.cmgwealth.com

(Note: I don't have a public position on whether he is right or wrong)

 

[zarkgregory91]

Apple may never reach 10 trillion, as there is no certainty that the company will last that long.

However, if they do survive it will take a very long time: It’s taken 42 years to get to a trillion so I wouldn’t bet on it happening this century.

 

[pshufd]

So you buy a 10 year bond and lose 5+% per year in purchasing power?

It's all a matter of timing. You trade TLT, you don't buy it and hold it forever. Were you around when bonds were paying in the teens of percent? What would it be like holding them for 30 years?

 

[pshufd]

This thread has taken a turn that ties into what an analyst I follow has been talking about for the last several months:

On My Radar: Tough Love in Fed Minutes - CMG

January 7, 2022 By Steve Blumenthal “An optimist understands that life can be a bumpy road, but at least it is leading somewhere. They learn from mistakes and failures and are not afraid to fail again.” – Harvey McKay, seven-time New York Times best-selling author of “Swim With The Sharks...

www.cmgwealth.com

(Note: I don't have a public position on whether he is right or wrong)

Global Macro models are saying inflation and then deflation this year. And then we go into the part of the economic cycle where bonds, utilities, real estate, staples and healthcare do well.

 

[KaliYoni]

Global Macro models are saying inflation and then deflation this year. And then we go into the part of the economic cycle where bonds, utilities, real estate, staples and healthcare do well.

It will be interesting to see how FIRE acolytes do in a higher interest rate, possibly recessionary environment.

 

[pshufd]

It will be interesting to see how FIRE acolytes do in a higher interest rate, possibly recessionary environment.

The $SPX had total returns of 28.7% in 2021 or about 3 1/2 times the gains in a normal year. You could argue that FIRE folks should just go to cash at the start of the year and sit 2022 out.

The 10-year yield has been dropping for the 42 years. Are you expecting it to bust out to a whopping 3 or 3.5%? We're likely going to go into deflation in late Q1 or Q2. Powell made a policy error back in summer 2018 by raising rates. Global markets started crashing and the US joined in October. The Fed was super hawkish almost into Christmas and then did a hard 180. The policy error was that tightening made the US dollar stronger and caused all kinds of problems around the world for anyone with dollar-denominated debt.

I do not know if Powell learned from that or not. But we have the confluence of tighter fiscal and monetary policy, rising corporate profits and rising wage growth. And the folks I listen to are saying inflation and then deflation. Start nibbling in defensive stuff. And buy China.