The Apple stock predictions for 2018 are very pertinent at the current scenario.
Especially after the stupendous performance in 2017, 2018 holds a lot of hope.
The stock has run up almost 50% in 2017.
Mac and Apple Watch sales are on the rise.
iPad sales also have bounced back considerably.
The services business is on the upward trajectory.
The company clocked $30,000 billion run rate and looks like the uptrend will continue.
Most investors will want to know, does it make sense to hold this stock?
The fundamentals of Apple stock are indisputable.
For decades now, it has led the technology innovation from the front.
They have completely revolutionized the way we conceive mobile technology.
Even after the demise of their iconic founder, Steve Jobs, Apple team has not slackened the pace.
They continue to churn out brand new experiences at a phenomenal pace.
The company continues to reinvent innovation and experiences.
Today the iPhone or the iPad is a representation of many unique sensibilities.
So the question then is what are Apple stock price predictions?
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Long-Term Apple Stock Predictions
There are several things that you have to consider, if you want to know about the Apple stock price direction in long-term:
1. Price Chart Analysis
There is a too strong uptrend which has broken above all the resistance levels already.
The uptrend is too steep now.
It means it is strongly possible that it goes down to retest the last broken resistance level at $130.
Therefore, it can be a little risky to enter now that the price is $176.
However, you can wait for the price to go down to retest the $130 level.
Then it would be safer to buy the Apple stock and enter this fast growing market.
2. Long-Term Sales Outlook
When you look at Apple stock predictions, the 2018 sales outlook is crucial.
One of the biggest concerns is will it be able to maintain 2017 track record.
Well, most industry veterans think that iPhone X and its other variants will clock brisk sales.
What is particularly interesting is Apple’s positioning.
The hitherto premium mobile phone maker is looking at inclusive growth.
This means it is also looking at capturing the mid-range mobile market.
This segment thus far has been the bastion of Android phones.
But there may be the substantial difference going forward.
Apple has maintained a supply of iPhone 7 and 7-plus at $100 discount.
This is even after the launch of iPhone X and iPhone 8 and 8 Plus.
The idea is to make a product available at a different price point.
This is surely a sign of changing times.
Traditionally iPhone discontinued the use of earlier models.
But now even iPhone 6 and 6 Plus are available at a discounted rate.
The price of the iPhone 4-inch SE is available at a discounted rate.
There are talks of a refurbished version of this model in 2018 too.
The cutting edge advantage offered by iPhone X is Apple’s next big bet.
The OLED display and the Face ID features are likely to retain the high-end customer base.
They feel there is sufficient juice to stop them from buying any other mid-range phone.
This also gives an edge to Apple go after the more price-sensitive customers aggressively.
This strategy can really help strengthen Apple’s position in markets like China.
They have some stupendous mid-range options like Vivo, Oppo and Huawei.
The strategy may also enhance iPhone sales in other Emerging Markets too.
The idea is to also look at a more widespread growth across customer range.
3. Tax Reforms in US
When you look at Apple stock predictions, the existing tax situation has to be considered.
In this context, it is interesting to note changes that Trump is introducing.
He is in the process of introducing tax repatriation for corporates.
Apple will be one of the major beneficiaries of the move.
It is needless to mention that it is one of the factors of stock price prediction.
More than 50% of Apple’s revenue is from overseas.
The company has over $250 billion in offshore cash.
Post these developments, the company will be able to bring back a greater chunk of the cash.
Therefore, it can use the same cash for a variety of expansion.
It can also address some buyback issues using the same.
This includes the likes of an increased dividend pay, buyback and what not.
The street is undeniably waiting for the potentially favorable developments.
That means it makes sense to hold the Apple stock going forward.
The Apple stock price prediction surely takes into account this additional value.
It undeniably represents continued value for the shareholders.
So, this is not just a stock that gives short-term profit, it is there for long haul.
4. What Warren Buffett Says
The Oracle of Omaha is known for his iconic stock holdings.
It is really interesting what and how he sees this stock going forward.
You may have heard talks about Apple’s slow death since the demise of Steve Jobs.
But Warren Buffett is not convinced.
Instead, he endorsed the stock recently and is invested in it in a meaningful way.
With a 2.6% stake, his company Berkshire Hathaway is the fifth largest owner of Apple stocks.
This is particularly an exciting development.
This is because traditionally, Berkshire Hathaway is not very heavily invested in technology.
In fact, technology is not one of Buffett’s favorites.
But the investment guru is quite gung-ho about the fundamental story in Apple.
He is very confident about Apple out-performing its peers in the technology space.
So if you worry about Apple’s weakening, it is interesting to note Buffett’s viewpoint.
He feels that the company has a distinct advantage over its peers.
This gives the company sufficient room for maneuverability.
Apple’s customers are undeniably one of the company’s biggest assets.
Through the iPhone X, its $1000 billing rate is testing limit.
But experts say the new phone is unlikely to rock the Apple cart in a significant way.
In fact, Apple has gone ahead and vindicated its biggest naysayers.
Demand for the iPhone X has remained strong since its launch.
This also goes on to prove the moat-like corollary that Buffett uses.
It proves his point that Apple will be able to hold its own even in the face of competition.
This also acts as the biggest trigger for jumpstarting the next level of innovation.
But Buffett’s endorsement surely goes a long way in substantiating the company’s claim.
It sure adds weight to the Apple stock predictions.
5. Broadening iPad User Base
But iPhone is not the only growth trigger for Apple.
It is looking at a tackling the user base for other products too.
One of the other major revenue sources is the iPad.
But thus far, the rate of success is not huge.
Apple has experienced only moderate success.
Will 2018 change these dynamics completely?
Well, perhaps not but the expectation is that it will make some inroads.
A single year may never be sufficient to change people’s habits.
But the hope is for a distinctive rise in user base over the next few years.
The iOS 11 can be a game changer in this context.
It is set to bring about an array of development and progress in this context.
It is set to introduce many multitasking features in the iPad.
2018 is set to change the entire environment.
The iPad Pro will be launched and there are talks of a high-end tablet too.
The idea is that this high-end variant may mirror features similar to iPhone X.
It may support face identification and even do away with the home button.
This means that the screen area will be much bigger, and it may emanate high value.
Apple reportedly is also in talks with developers to design apps that run on Mac and iOS.
That surely will bring a lot more activity and crossover in the existing user base.
The idea is to attract a large number of users back to iPad.
It is being constantly pitched as a necessity along with iPhone.
Apple plans to make this also an equally important channel of growth.
That is a decided sales trigger and serves as a positive for the stock.
6. Growing Services Revenue
Another major trigger for a buoyant Apple stock price prediction is the services revenue.
Apple’s global base of iPhone users can soon become one of its greatest assets.
The technology major will now get an opportunity to monetize this user base.
This will be directed primarily using the services division of the company.
This is already a profitable division for the company.
In fact, it is the second most profitable segment for Apple in terms of revenue inflow.
It represents well over 10% of the total revenue that Apple earns.
Further monetization of the segment will add to this profit going forward.
Most industry experts feel that the company will continue with this growth trajectory.
Needless to mention then that the overall revenue line-up is then likely to get a fillip.
Growing momentum in the mobile commerce segment is also likely to aid the services revenue.
Mobile gaming and mobile entertainment too are improving in a sustainable manner.
As a result, these segments are likely to help services revenue.
Needless to mention, this can only add to the intrinsic value that the stock represents.
The Apple stock price prediction undeniably accounts for these positive developments.
As a result, the stock continues to represent sustained value.
7. Innovation Overdrive
A major trigger for the buoyant Apple stock predictions is its eye on future.
Apple is not just a story about a tech-savvy present.
The company’s value is deeply entrenched in its future endeavors too.
In this context, Apple’s investment in video is worth mentioning.
The company has set close to $1 billion for original video content through 2018.
In fact, it has already signed a pact with a media major toward this end.
It plans to revive some popular and iconic content through this pact.
The Apple music subscriber base is huge.
The total number of subscribers is well above 25 million
It can easily bank on its huge user base for its video initiatives.
The proposed tax holiday will also free up a significant amount of offshore cash.
This can give the company the desired leverage for even more large-scale expansion.
There are also market buzz about Apple’s interest in a key production company
Though the news is not substantiated thus far, it can work towards creating substantial value.
The huge reserve of offshore cash can easily be used to address this initiative.
But for this deal to pay off, Apple will also need to work on a stable distribution channel.
It will not be able to pull it off by simply using its existing set of the user base.
Whether this deal actually happens or not is still a matter of future discussion.
But the fact that this possibility exists is huge in terms of generating value for the stock.
But Apple Music is undeniably developing in many ways.
The trick is to identify how best the company can utilize these opportunities.
But all of these are in the realms of possibilities.
That, in itself, lends a lot of juice to Apple stock predictions over long-term.
8. The Apple Car Impetus
The talks about Apple Car are also gaining momentum.
Needless to mention that these also impact the Apple stock price prediction positively.
Tim Cook has confirmed to an extent about Apple working on an autonomous driving system.
There are hardly any details about how far Apple has progressed in this segment.
There are unconfirmed reports that this autonomous driving system is at par with Alphabet.
Even Tesla’s automatic unit is seen as a close challenger in this segment.
So if Apple is getting serious in this space, there is significant competition deal with.
The other major competitors in this segment include Bosch and Delphi.
Apple may look at developing the operating units of cars.
This kind of arrangement may work as a symbiotic arrangement.
But all of these is still in the realms of presumptions.
We need complete confirmation before factoring this in Apple stock predictions.
9. Brokerage Recommendation
Last but not the least, the brokerage views also indicate a positive price bias.
The Apple stock price prediction is nearly $192 per share.
Compared to the current rate, this signals a significant appreciation.
A majority of the brokerages are Overweight on the stock.
This is primarily on the back of a buoyant earnings outlook and revenue stream.
The earnings per share may also top the $2.50 mark on a sustainable basis.
This is another positive trigger for brokerages with a positive bias.
A majority of brokerages are Overweight at the current rate with a few Buy calls too.
The most striking factor is that there are practically 0 sell calls on the stock.
That shows the kind of investor confidence in the future earnings outlook.
The median estimate for the PE ratio next fiscal is also encouraging.
Estimates indicate that the price to earnings ratio is likely to be steady at 13.
This also projects a positive picture of the overall debt profile of the company.
Brokers also attach a lot of credence to the overall positive impact of proposed tax policies.
One of the most bullish recommendations is from Bank Of America Merrill Lynch.
The brokerage has not just reiterated BUY on the stock; its price target is huge too.
Most other brokerages see the Apple stock between $195-198/share.
But the BoAML sees the Apple stock well past the $200 per share level.
That indicates that Apple may well be on course to occupy $1 trillion market in future.
Many market players indicate that this is primarily based on stable iPhone sales.
The stability in sales can improve earnings phenomenally.
The Apple stock price prediction factors this.
Conclusion: Apple Stock Predictions Indicate a Favorable Long-Term Prospect
The stock is set to see the advantage of a distinct improvement in revenue flow.
iPhone sales were considered the biggest risk going forward; the trend indicates the opposite.
As per the developments thus far, there is no significant slowdown in iPhone X sales.
What’s even more heartening is the additional steps they plan to take.
The company’s policy towards mid-range phone users is seen as a big boost.
The stock is popular as a high-end and premium priced product.
But a more accommodative price point may increase the number of converts.
It is expected to result in a significant jump in the total number of users.
Apple no doubt provides an aspirational value to most first time users.
An affordable entry price will encourage more users to buy the iPhone.
This will undeniably improve the overall sustainability of the Apple story.
The additional cash flow also provides better prospects for expansion.
Even in terms of dividend payout, there can be a positive development.
That coupled with the proposed tax reforms led to encouraging stock price prediction.
Last but not the least, Buffett’s endorsement also impacted Apple stock price prediction.