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Dan Ives is particularly bullish on the company’s software business which is currently valued at $1 trillion.
Apple Inc (NASDAQ: AAPL) stock is up 0.21% to trade around $127 during the pre-market session. Apple closed the trading day yesterday with a market valuation of approximately $2.1 trillion but Wedbush analyst Dan Ives expects the company to hit $3 trillion by 2022.
AAPL Stock and Market Outlook
The tech company has been the second-last performer among the FAANG stocks, and its YTD shares are down 4.48%. Apple stock dropped 11.7% in December and the S&P 500 index also fell 9.3% after the company provided lower-than-expected guidance to investors.
Nevertheless, the tech giant still ranks first in the list of the most valuable companies worldwide, with its present market cap at an estimated $2.1 trillion. The company crossed the $1 trillion mark in 2018 and the $2 trillion mark in 2020, setting a trend that creates speculation of a $3 trillion mark in 2022.
“If you look at innovation, I believe this is like the next phase of growth if you look at the ongoing supercycle in the services business,” Ives said. Notably, he was backed by Gene Munster of Loop Ventures who stated that the work-from-home policy worked in favor of the company.
Ives is particularly bullish on the company’s software business which is currently valued at $1 trillion. He expects this value to rise to around $1.5 trillion which will bring Apple closer to a $3 trillion valuation.
During its Worldwide Developers Conference (WWDC) on Monday, Apple showed off various updates, including iOS 15 – the latest version of iPhone OS and iCloud+, a VPN-like service that masks users’ browser history. Moreover, new iPhones are anticipated by the end of the year and efforts are being made towards the development of Apple’s EV, which could be Tesla’s greatest competitor.
On the Flipside
Apple has faced antitrust issues in various jurisdictions and a fiery court battle with Fortnite’s owner Epic Games.
Epic Games accused Apple alongside Alphabet of monopoly due to the high (30%) revenue cut on software developer’s revenue. Fortnite was later removed from the App Store for alleged violation of guidelines. A few hours later, Epic Games filed a case, accusing Apple of anti-competitive behavior. The tech company countered this, seeking compensation from Epic Games for breaching policies.
Additionally, Spotify CEO Daniel Ek alleged that Apple continues to introduce stringent rules for its App Store which intentionally stifle innovation from other software developers. Apple faces growing regulatory scrutiny all over the world, according to Ives. In April the European Commission claimed that the company “abused its dominant position” in the distribution of music streaming apps through its App Store.