Forget $645: $92 is new reality for Apple (AAPL 1.27%) stock these days.
After the tech giant's shares split 7-for-1 last Monday, Apple's shares are looking decidedly cheaper to the untrained eye. However, the Apple bull case remains significant and, more importantly, completely unchanged despite the dollar-and-cents differences that are mostly (but not entirely) cosmetic in nature.
So as investors continue to wrap their heads around Apple stock now trading in the double digits, let's look at several key catalysts that I believe will have Apple stock back into the triple digits sooner than perhaps many investors realize.
1. A blowout quarter is in the works
With much of the post-WWDC investing narrative focusing on Apple's second-half product launch cycle, many investors appear to overlooking the here and now for Apple.
That will probably turn out to be a major oversight, as several key indicators have recently suggested that Apple's in the midst of another record-setting quarter. iPhone shipments are trending toward 39 million units shipped in Apple's current fiscal third quarter, well ahead of the current FY Q3 record of 31 million iPhones Apple set last year and starkly higher than the 35 million average estimate that Wall Street's calling for this quarter.
The iPhone shipments figure is an especially important driver of Apple's financial performance, as it's not only Apple's most profitable product but also its largest single source of revenue. So an unexpected boost to iPhone shipments implies a home-run earnings report once again on the way for Apple stock.
2. iPhone 6: An undeniable opportunity
The iPhone 6 has three extremely important variables working it its favor, which will probably make it Apple's most successful iPhone ever.
For starters, Apple's aging installed base of iPhones, as well as the company's move to slowly withdraw support for legacy devices such as the iPhone 4, mean a lot of consumers will probably be ready to pull the trigger on a newer iPhone with the advent of the iPhone 6. This fact, combined with Apple's likely screen-size increases and segmentation into 4.7-inch and 5.5-inch models, also plays into the broader theme of larger screen sizes we've seen play out across the entire global smartphone market in recent years. And lastly, Apple's gone a long way in extending its global distribution footprint, which will position Apple's new handset to be accessed by an entirely new set of consumers when it unveils the iPhone 6. No matter how you slice it, the iPhone 6 presents a potentially historic opportunity for Apple investors.
More catalysts ahead for Apple
These two factors are arguably the most significant short-term catalysts that could propel Apple stock above $100 in the months ahead, but they're by no means the only ones working in Apple's favor. Apple's long-awaited iWatch, as well as any number of the myriad of new product offerings Apple could have in the works, will help create entirely new profit centers for the tech giant. Moreover, each new additional new product offering will further solidify the Apple ecosystem's already massive network effects. Apple's recently unveiled Health app, and upcoming proliferation of wearable-related software, should serve as a healthy reminder of this key fact.
The analyst community appears to be slowly warming to the idea that Apple has plenty of drivers that could push its stock price beyond $100 in short order. Last week, RBC Capital Markets increased its price target for Apple stock to $100, citing many of the same factors I've mentioned here, and I think it's safe to expect more of this behavior from the analyst community in the months to come. So while shares have been on a tear over the past few months, I'm still a firm believer that Apple's recent rally has plenty of room to run in the months to come.
