And to think a friend of mine recently told me that AAPL was losing its steam and that I should take my profits and run. He sort of gave me that patronizing sigh when I told him I was holding.
That was $16 ago. Me and my trailing stop loss are glad we didn’t listen.
Yesterday, AAPL closed at $106.88, an all-time high for the company. This doesn’t come as too much of a surprise seeing how many analysts have been raising their target prices for AAPL since January. Recently, some have even bumped their estimates to $130/share.
The drivers for this are obvious: next month Apple will sit down and show us where Leopard stands today, and I suspect that will be more interesting than any of us think. That will be the kickoff to what I suspect will be a steady stream of Leopard news from now until its launch. The Leopard show will begin in earnest.
Of course, the big cheddar these days is coming from the iPhone, which is tracking to a late June delivery date and will legitimately have enough volume to satisfy demand. While it’s fun to listen to Ballmer theorize that Apple won’t make a dent in the smartphone market with its dumb ol’ niche-playing iPhone, make no mistake: the iPhone’s release is the launch of Apple’s next massive growth engine. If you thought the iPod drove Apple as a company, sit back and watch what the iPhone does once the entire line of models (I don’t believe for one second the phone we’ve seen is the only attack vector into the mobile phone market) is available to consumers.
And then there are the hardware refreshes that are bound to come, as this sort of news — rendered fairly mundane by the other goings-on, but nonetheless interesting — is overdue. Intel just released its Santa Rosa platform for mobile computers, and already HP and other manufacturers have notebooks available that leverage it. Apple isn’t far behind — trust me.
In case you don’t follow hardware news like I do because you actually have something more interesting to do (and good for you, BTW), the Santa Rosa platform provides better battery life, faster overall speeds, support for 802.11n wireless and NAND flash memory support (alongside a traditional hard drive) for very fast booting.
This is what Apple has been waiting for. I suspect we’ll very quickly see MacBook Pro updates (and MacBook, eventually) that leverage this new technology.
So while there’s certainly some irrational exuberance creeping into AAPL’s valuation these days, most of it is very rationally forward-looking. Apple has been quiet lately, and there was a tinge of sourness to the Leopard delay and some fleeting nervousness about the stock options ordeal, but it’s clear what the investors are divining about Apple: the show is just beginning, and there’s still quite a bit of upside to be had.
FULL DISCLOSURE: I own a few hundred AAPL shares, which should be apparent in paragraph two, but I figure I’ll reiterate it here just to be safe.
13 responses so far ↓
Brian Purkiss // May 10, 2007 at 1:58 am
Gosh Apple is insanely awesome.
I love everything they do.
And I’m not suprised one bit that their stock is still rising.
David Levine // May 10, 2007 at 6:48 am
I like Apple too, and it’s great to see that Apple star ascending, but I have my doubts about the iPhone. I think that the phone market is oversaturated. But I hope I’m wrong. I like Windows Vista too (mostly because the UI is so Apple-ized) and thought it would be more than the flop it seems to be, commercially.
Anonymous // May 10, 2007 at 10:45 am
“I think that the phone market is oversaturated. But I hope I’m wrong.”
yea, but the opportunity exists because even the best smartphones–like the Treo– still suck.
“I like Windows Vista too (mostly because the UI is so Apple-ized) and thought it would be more than the flop”
It would help MSFT if Vista wasn’t 20-30% slower than XP….
Tom B // May 10, 2007 at 10:46 am
“I think that the phone market is oversaturated. But I hope I’m wrong.”
yea, but the opportunity exists because even the best smartphones–like the Treo– still suck.
“I like Windows Vista too (mostly because the UI is so Apple-ized) and thought it would be more than the flop”
It would help MSFT if Vista wasn’t 20-30% slower than XP….
BertC // May 10, 2007 at 11:33 am
“Yesterday, AAPL closed at $106.88, an all-time high for the company.”
So far at ~11:13 am est today, AAPL hit an all-time high of 108.84… I sold some at $102 last week thinking FUD that usually follows will make the price drop back down so I can buy it lower
I still believe the stock will dip back down to around 98-103, maybe more just before the iPhone release… Am I a fool to think about selling more and take advantage of the peaks today so I can buy it back when it dips? I’m a long-term AAPL holder, bought most at $11 split-adjusted.
Gerald Buckley // May 10, 2007 at 12:22 pm
“Wait for it… Wait for it…”
There’s a split coming somewhere on the horizon. Catch that and ride the multipliers up, up, up!
I got in at $66+change and bailed in Oct/Nov at $88+change. No regrets. But, good for you and the super run this rocket ship called AAPL is on.
Bill // May 10, 2007 at 12:42 pm
I regard to the iPhone, my Treo 650 finally died after 4 months of use. Palm warranty stated it covers 3 months and Cingular covers1 yr, or something like that. The palm warranty may be for support. Whatever. The Treo was in the box for 8 months and I had 2 weeks warranty from Cingular remaining. Cingular sent a replacement phone and an additional 90 day warranty. That was great since I got the phone free from TDAmeritrade. Well, I have about $420 in credit from Apple, so I may get the iPhone after all when this new Treo craps out. However, I am not sure that I would want one if I did not have the credit. It does not seem worth the price. I can get a new Treo 680 from Cingular for $200 with a new 2 yr agreement, and they have been good to me for 18 months. I have a 2GB iPod nano that is collecting dust [it was free from TDAmeritrade as well]. It seems like a personal choice for this stuff. I can afford anything and still would hesitate to buy the iPhone, and I am a die hard Mac user.
beanie // May 10, 2007 at 3:20 pm
Obviously, Jeff is biased because he owns stock in Apple and many times takes the companies viewpoint. Now what does stock performance have to do with the consumer market. Big gross margins on hardware means making consumers paying more. That is good for company but bad for consumers.
Bill // May 10, 2007 at 3:43 pm
A CD or DVD costs less than a pennies to make, but Microsoft sells it software on it for hundreds of dollars. Is that what you mean?
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David Levine // May 10, 2007 at 10:03 pm
Yeah, I don’t really know that much about the wireless phone world- it just seems like there’s so many choices! I have a regular old Verizon Motorola Razr, I don’t need a computer-phone. My buddy likes his Treo but he has to mess with it a lot. But if the iPhone is as appealingly elegant as the iPod, maybe it will do great. Maybe I’ll even get one! I had a Newton once ( it was lame )!
Jeff doesn’t hide the fact that he’s an Apple fan, so I guess you’re right beanie. But if you are saying that Macs are overpriced, then I would say that I think Apple’s hardware is priced pretty fairly. Fans pay a little extra for the sizzle, but they get they get the steak too. As with Saabs, Volkswagens, and Volvos.
Tom B, how did you find that Vista is 20-30% slower than XP? I have Vista Business on a 2-year old laptop with 759M RAM and it’s been very well behaved and no slower than XP was on the same system. I like Vista cause it’s so Apple like, as I’ve said, but I’d sure love to have a MacBook Pro instead.
beanie // May 11, 2007 at 2:37 pm
Bill: are you being sarcastic? Software is different. Software is a code and hardware is a commodity. Compare Apple gross margins to other hardware companies like HP, Dell, and IBM.
Now memory is commodity item. Apple sells 1GB Apple memory upgrade for $200-$300. The PC memory street price is around $100-$150 or about $.10 per MB.
Bill // May 11, 2007 at 3:23 pm
Yep, I am only busting on ya. I actually own Microsoft and not Apple stock. I bought a long time ago [as well as AOL, now TW] and kept it. I just hate to part with it since it is worth less than what I bought it years ago. You should mention the hard drive upgrades for Apple. It was cheaper for me to buy TWO RETAIL 5ooGB hard drives [for RAID] than to buy ONE from Apple. WTF? This was for my Pro Tower. The RAM was more expensive, but some upgrades where not compatable, so I bit the bullet and got 2 gigs from Apple. It is actually hard for me to beleive that similar PC’s [same hardware config] costs about the same, but that is actually what sources on the web show. This includes the iMacs and MacBooks. Often times they include software and show that Macs are actually less expensive, even with a DELL coupon. The one thing that I cannot deny is reliability. The Macs that i know of have been much more reliable than PC makers. I build my own PC’s because I am picky about the hardware, but I do not think that it has actually saved me any money. But yes, I was being sarcastic to be funny.
Peace,
Bill