Back in 2018, Apple became the first publicly-traded company to cross the $ 1 trillion market cap. Apple is yet again gearing up to make new records. As per analysts and experts, it is expected that Apple may become the first-ever company to cross the $ 2 trillion valuation mark in the span of four years. Several experts and analyst have made the milestone prediction. However, a market research by Evercore ISI analyst has gained attention. Recently famous analyst Amir Darayanani has shared different ways which Apple will need to do to cross the $2 trillion mark.
Apple’s Growing Service and Wearable Business Will be Key Factors
Apple’s wearable business has seen exponential growth. The wearable segment, along with Home and Accessories has recorded a new March quarter record with a whopping revenue of $6.3 billion. Also, in the Wearable Business, analysts expect growth to $60 billion. The estimated growth of Wearable Business will rely upon the expansion of AirPods and Apple Watch. In the Service Business, it is expected that Apple will cross $100 billion in the next four years.
Apple’s Service Sector is Booming
Apple’s service sector will be one of the crucial factors which will help the company to achieve the $2 trillion market valuation. In the March quarter, Apple’s service segment has recorded an all-time revenue record of $13.3 billion in the March quarter. Luca Maestri who is the CFO of Apple stated that new services like Apple TV Plus, Apple Arcade, Apple News Plus and many others are adding new users consistently and adding to the growth of service sector. Analysts have also stated that since services are growing faster than the hardware operation, corporate gross margin will expand, which will increase the valuation of Apple.
Apple Will Continue to Buy Back its Own Shares
Analysts are also expecting that Apple will extensively buy back its own shares. Apple might reduce its share count by 1 million shares in the forecasted period from 4.6 billion at the end of 2019 to 3.6 billion in 2024. Analyst Amit Daryanani expects that at 3.6 billion share count, Apple will hit $2 trillion market valuation if the stock price is around $550.