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The early gain propelled shares to a record $515.14 and pushed the company’s market capitalization further above the $2 trillion level ahead of two key events.
“We believe that AAPL can continue to outperform peers and the S&P 500 in the near-term as Apple approaches two key catalysts – 4-for-1 stock split on August 31st and the launch of Apple’s first 5G iPhone in October,” wrote Morgan Stanley analyst Katy Huberty in a recent note.
Enthusiasm surrounding the upcoming split, which was announced alongside the company’s strong second-quarter results released July 30, has helped catapult shares higher by 29% through Friday.
Apple has added $482 million of market capitalization since the split announcement, on its way to becoming the first U.S. company with a $2 trillion valuation. State-owned Saudi Arabian oil giant Saudi Aramco briefly eclipsed the mark shortly after its December initial public offering.
The excitement surrounding the split could provide a near-term catalyst to drive Apple’s market cap further above the $2.127 trillion where it finished on Friday, according to Matt Maley, a Boston-based chief market strategist at Miller Tabak & Co.
“My understanding is that when they're [stock splits] announced, the stock goes up and when it actually takes place, the stock also goes up, but then it usually flattens out shortly thereafter,” he told FOX Business, citing what he learned when starting on Wall Street in the late 1980s.
If the rally fizzles out around the split, the 5G cycle has a chance to drive more than 235 million iPhone shipments in fiscal year 2021, according to Huberty.
She believes shares could reach $681 in a bull-case scenario as investors place a premium on Apple shares due to “greater confidence in the sustainability” of its long term growth.
Apple shares have soared 69% this year through Friday, outpacing the S&P 500’s 5.15% gain.