The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
John and David have talked a lot about Apple in recent months. Today, they discuss three additional reasons why the stock is worth buying today. First, the iPhone5 is most likely on its way. Each upgrade cycle has pushed unit sales higher. In fact, the iPhone franchise generates more revenue per quarter, on average, than Microsoft's entire business. Second, retina display investments are starting to pay off as the technology is spreading through its product line and paving the way for AppleTV. What innovations have Dell or Hewlett-Packard come up with recently? Finally, it appears that there is a smaller iPad in the works. It's a good thing Amazon.com is revamping its Kindle Fire because Apple is going to keep investing in incremental tablet options to keep the competition at bay. If a company is consistently growing earnings at 15%, it could possibly trade for a multiple of 20 times earnings. That could put Apple at $1,080 per share, or worth more than $1 trillion in market cap, by 2013. Those are very attractive potential returns.
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David Meier owns shares of Apple. John Reeves owns shares of Apple. The Motley Fool owns shares of Apple, Amazon.com, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.