With the remote-work and virtual-learning trends accelerating during the pandemic, demand for Apple (AAPL -1.83%) products like the iPhone, Mac, AirPods, and iPads has surged. The technology juggernaut's stock price has soared in recent years as well. Apple's market value now stands at a stunning $2.8 trillion and recently topped $3 trillion for a brief time.
Yet, incredibly, even more gains are projected going forward for investors. Here are two major catalysts that are likely to drive Apple's share price to new all-time highs in the coming year.
Apple's anticipated product launches are likely to make investors smile. Image source: Getty Images.
1. A staggering opportunity in services should fuel sales and profit growth
Investors love high-margin, recurring revenue. Apple's services division produces it in droves.
The number of active iPhone users has likely surpassed 1 billion people, according to Citigroup analyst Jim Suva, and doesn't necessarily include the hundreds of millions of additional Mac and iPad users. That provides the tech titan with an enormous global user base to sell its steadily expanding array of service offerings. Apple Pay, TV+, Music, Fitness+, Arcade, News+, Podcasts, Books, and iCloud combine to give users a wide selection to choose from. Apple One, which bundles up to six Apple services into one subscription, offers additional savings and convenience.
These services and bundles are clearly popular among consumers. Apple's services revenue surged 27% year over year to a staggering $68.4 billion in fiscal 2021, which ended on Oct. 28.
Looking ahead, Wedbush analyst Daniel Ives expects that figure to grow to over $100 billion annually by 2024. In turn, he believes Apple's services business could be worth as much as $1.5 trillion, or more than half its current market cap.
2. New products could further boost demand for Apple's stock among growth investors
Apple is renowned for entering new markets and quickly capturing the lion's share of the profits from those markets. It appears the tech giant is gearing up to do so once again in another potentially massive industry.
Apple is reportedly developing virtual reality (VR) products. Its first major product release featuring this cutting-edge technology is believed to be a VR headset, which could debut later this year. The company is also said to be planning an even larger push into the augmented reality (AR) market, which is projected to grow to $77 billion by 2025, according to research firm Markets and Markets.
Ives says that Apple's VR/AR ambitions could also make it a powerful force in the metaverse, a burgeoning network of 3D worlds that has captured the imagination of futurists and, increasingly, investors. In turn, he estimates that Apple's VR/AR products could be worth as much as $325 billion in additional market value, or roughly $20 per share.
We're likely to receive more information about Apple's VR/AR plans during the company's annual developers' conference in June. The news should generate even more excitement for Apple's new products among consumers and investors. And as we near the launch dates of these products, this excitement could help drive Apple's stock price well above $200 per share.
