Apple (AAPL) stock has the potential to “meaningfully go higher,” according to analysts at Deepwater Asset Management.
His remarks come after AAPL already added $150 billion to its market cap on Wednesday, propelling the total market valuation to $3.27 trillion.
Analysts believe investors are likely now anticipating the company will earn around $9 in EPS for the calendar year 2026, compared to the Street's current estimate of $7.90. If the market is entering a 3-5 year AI bull market, multiple expansion is a “reasonable expectation,” they said in an X post.
“Those investors are zeroing in on a 35x earnings multiple next year. Currently, AAPL trades at 29x next year's earnings,” they wrote.
In a year, the market will start pricing in expectations for 2026, analysts noted.
“$9 x 35 = $315B, or 45% upside. That implies about a $4.7T market cap, which is hard to fathom,” they said. “Back in 2018 when Apple crossed the $1T mark, most thought $2T was impossible.”
Apple shares (NASDAQ:AAPL) added roughly 11% since Tuesday, when the tech giant unveiled its much-anticipated AI strategy at the WWDC event. It briefly surpassed Microsoft (NASDAQ:MSFT) on Wednesday to become the world’s most valuable company, though it couldn’t retain this advantage until the close, with MSFT finishing ahead at the closing bell.