Apple has found an unexpected supporter in FBR analyst Daniel H. Ives, who is convinced that the innovations the company keeps making in software technology would soon propel its overall value past the $1 trillion figure. “I think seriously the golden jewel is on the software side,” Ives detailed on his conclusion. “I think this is truly kind of the gasoline in the engine for Apple.”
Daniel Ives is not the only one who thinks Apple will exceed expectations in the near future. Activist Carl Icahn suggested a similar trend when he analyzed the value of the iPhone giant’s shares a few months ago, and he clearly stated then that the Apple’s stock is currently severely undervalued. He set a hypothetical value of more than $1 trillion for Apple shares, pricing company stock at $216.
In the FBR Capital coverage, Apple’s stock was tagged at $185, which is still the highest value given to any investment firm. FBR analysts argue that Apple will consistently outperform in the following years, and believe the company has enormous potential to increase its revenues. The investment firm projected a solid 24 percent increase in Apple revenues for this year, and expect the growth will continue next year, when they expect a 6 percent increase.
Ives believes that continuously remodeling its software to adapt to new gadgets and devices, such as the new Apple Watch, forces Apple to make innovations in software technologies. He thinks the company’s established cloud-based software system is a major plus and Apple will continue to develop in this direction. Ives goes very far with his estimations, arguing that within a few tears more than 90 percent of the company’s business will be focused on this area.
“Apple ecosystem highlights the importance of software at Apple’s core while also adding a new revenue stream with massive potential over the coming years,” the FBR report stated. “The company’s software is the glue that binds them together to create a unique customer experience and ultimately adds the most value for the company.”
In terms of new markets, Ives believes that China will be most profitable for future Apple investments in software. The iPhone is known to have been a huge hit on the Chinese smartphone market, one where important local players like Huawei, Xiaomi and HTC were eclipsed by Apple’s success.
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