Apple's (NASDAQ:AAPL) market capitalization will grow by roughly $200 billion as its stock price climbs to $400 within the next year.
So says Citi analyst Jim Suva. On Tuesday, Suva reiterated his buy rating and boosted his target price for Apple's stock from $310 to $400. That's the highest estimate among major investment banks -- and it makes Suva the biggest Apple bull among Wall Street analysts.
Suva says Apple will benefit from a 5G-fueled iPhone upgrade cycle beginning this fall. That, in turn, could drive growth in the tech giant's services businesses as more users pay for AppleCare support services.
Suva also believes that the COVID-19 crisis could accelerate the adoption of Apple Pay, as consumers increasingly turn to contactless payments in place of cash.
Additionally, Suva posits that Apple could offer a services bundle that includes Apple Music, Apple News, Apple Arcade, and Apple TV+ to further boost sales.
If Sulva is correct and Apple's stock does rise to $400, investors would see gains of approximately 14% from today's prices.
Is Apple stock worth $400?
Yes, I believe it is. And it could be worth much more.
A 5G-related upturn in iPhone sales could certainly be a powerful growth driver for Apple's profits and, by extension, its stock price. Higher iPhone sales would also help to boost sales of the company's services, as could a bundled offering.
Moreover, we've already seen evidence of a coronavirus-related acceleration in the growth of digital payments and contactless technology from companies such as PayPal, Visa, and Mastercard. It's a safe bet that Apple Pay will also benefit from this powerful global trend.
With all of these growth drivers helping to fuel its expansion, Apple's stock could easily surpass $400 per share over the next year.