Shares of Apple (NASDAQ:AAPL) have seen quite the run-up recently. Over the past year, the stock is up more than 80% as investors have applauded the company's continual evolution to a business model that is less dependent on hardware revenue and is more services-based.

But one analyst thinks the stock can continue to climb higher over the next four years -- so much so that the company's market capitalization would rise from about $1.4 trillion today to $2 trillion. On the surface, this might seem like an outlandish forecast. But a closer look at Apple stock reveals that a $2 trillion market cap in four years may not only be possible but even likely.

Apple CEO Tim Cook during the company's 2019 WWDC keynote presentation

Apple CEO Tim Cook. Image source: Apple.

The path to $2 trillion

Since surpassing a $1 trillion market cap in 2019, shares of Apple have continued to climb sharply. Today, the tech giant is already valued at about $1.4 trillion. But Evercore ISI analyst Amit Daryanani thinks that shares will rise about another 70% over the next four years to $550. This would give the company a $2 trillion valuation.

Further robust growth in Apple's services and wearables businesses and strong operational tailwinds over the next for years will help the tech company achieve this, says Daryanani. 

More sharp growth in Apple's services segment is key to Daryanani's optimistic outlook for Apple. In a recent note to investors, Daryanani said he believes Apple's services business' annual revenue could rise from about $46 billion in fiscal 2019 to $100 billion by fiscal 2024. More importantly, he believes the segment's contribution to gross profit could rise from about 30% of total gross profit today to 45% of total gross profit in fiscal 2024. The launch of new services and improvement in average revenue per user will help this high-margin, recurring-revenue business grow, Daryanani predicts.

Why $2 trillion is a reasonable target

For Apple stock to appreciate enough within four years for the tech company's market cap to hit $2 trillion, shares would have to rise at an average rate of 14% over the four years. Given Apple's conservative valuation today and its momentum in both services and wearables, it's fairly easy to imagine the company's stock price appreciating this much.

Today, Apple has a price-to-earnings ratio of about 25. For a market leader with a 38% gross profit margin, net cash of $83 billion on its balance sheet, annual free cash flow of $66 billion, and more significant potential upside for both the company's services and wearables businesses, the stock's valuation today is not only fair -- but possibly even a great buying opportunity.

A $2 trillion market cap for Apple in four years wouldn't be surprising.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.