Apple Stock: Looking Good, on the Breakout

Apple (AAPL) stock broke out in a big way this past week, with shares pole-vaulting over 10%, propelling the stock to a new all-time high just north of the $175 mark.

Those who slept on Apple likely did not have much time to get in on the upside move, as Morgan Stanley (MS) slapped the tech titan with a new Street-high price target of $200.

It’s quite remarkable that Apple was able to blast off in spite of the recent report that showed the impact of supply chain shortages and its impact on demand for the iPhone 13.

Undoubtedly, Apple told its suppliers that demand was slowing. Given how influential the company’s flagship phone is to the business, one would have thought production halts would have resulted in a steep sell-off. Nobody would have held it against Apple if its stock sagged alongside most other tech stocks going into early December.

Apple stock held its own, though, maintaining resilience in the face of sector-wide volatility, and that’s a true testament to its staying power.

As Apple looks to power higher, I think it could lead the FAANG cohort en route to the $3-trillion market cap mark. Even after a remarkable rally, I remain bullish on the stock and think it has room to run as it makes up for lost time. (See Analysts’ Top Stocks on TipRanks)

What Supported Apple Stock?

It’s not just about the iPhone anymore. If it was, Apple stock would probably be back below the $140 mark.

Instead, investors seem bullish over the long-term fundamentals, which could improve substantially. With an ambitious report that noted the Apple Car could launch in 2025 with driverless capabilities, and a report from Ming-Chi Kuo that noted an AR headset that could land in the back half of 2022, analysts have had to change some inputs in their financial models.

Undoubtedly, an AR, VR, or mixed-reality headset from Apple would be a positive surprise that could give CEO Tim Cook his long-awaited “one more thing” moment since pulling the curtain on the Apple Watch.

Metaverse Hype

The timing of such a headset has made the company a prime target of the recent bout of metaverse hype inspired by Meta Platforms (FB) just over a month ago.

While Meta is undoubtedly a go-to play to expose oneself to the metaverse, Apple is arguably a smarter way to play it. Why? Apple knows when a next-generation technology is ready for prime time. It always has.

The metaverse remains abstract for many people who’ve yet to experience it for themselves, either through a pair of VR goggles or through virtual gaming worlds like those built on Roblox (RBLX).

The metaverse holds potential, and the ongoing COVID-19 pandemic could continue to accelerate its move to prime time. Could Apple’s headset be ready for next year, as some think? If it is, Apple stock’s latest run may just be an appetizer for an even more significant rally, potentially past the $200 mark.

Meta may be the more obvious metaverse play for now, but this could change once Apple deems it’s ready to reinvent the mixed-reality headset.

Indeed, all firms engaged with the metaverse could stand to benefit once Apple does look to bring the metaverse into the mainstream. Still, at just 30.5 times trailing earnings, Apple stock seems like one of the cheapest ways to play the trend, given its ability to dominate.

Apple Car Hype

Further, with a potential Apple Car on the way in as little as three years following Kuo’s predicted release of an AR headset, Apple stock could find itself on the receiving end of even more price target boosts.

Indeed, the growth in new markets like AR and EVs has the potential to be unfathomable for Apple.

As we learn more, expect Apple stock to continue marching higher, even if iPhone sales fall short. Apple already has its sights set on where the puck is headed next.

Wall Street’s Take

According to TipRanks’ analyst rating consensus, AAPL stock comes in as a Strong Buy. Out of 28 analyst ratings, there are 22 Buy recommendations, five Hold recommendations, and one Sell recommendation.

The average Apple price target is $169.88. Analyst price targets range from a low of $90 per share to a high of $200 per share.

Disclosure: Joey Frenette owned shares of Apple at the time of publication.