Shares of Apple (AAPL -1.23%) rose 3.5% to a record closing price of $171.18 on Tuesday, after an analyst placed a price target on the stock that represents a new high among Wall Street's estimates.
Morgan Stanley analyst Katy Huberty now sees Apple's shares rising to $200, up from a previous forecast of $164. If she's right, investors could enjoy gains of roughly 17% from today's price.
Huberty sees Apple's share price rising as traders seek out high-quality companies that are thought to be safer investments, now that volatility has returned to the financial markets. She also expects Apple's supply chain challenges to abate in the coming quarters, thereby helping to drive iPhone sales higher.
Additionally, Huberty argues that Apple's current stock price does not fully reflect its ability to innovate. The tech giant is reportedly developing augmented reality products and self-driving vehicle technology, which could boost demand for its shares among investors ahead of their expected launch dates.
"As we get closer to these products becoming a reality, we believe [Apple's] valuation would need to reflect the optionality of these future opportunities," Huberty said.
Few companies match Apple's track record of innovation. Time and again, Apple has created game-changing products that have gone on to capture the lion's share of their industries' profits.
It's entirely possible that Apple could do so again in the realms of augmented reality and autonomous vehicle technology. In turn, it's conceivable that Apple's share price will ascend to Huberty's $200 price target -- and perhaps even higher -- in the coming year.