After seeing Apple post a hugely successful fiscal first quarter yesterday, investors are on a spending spree.
Apple’s stock soared in early trading today, surging nearly 7 percent to $449.33 after opening a touch higher still at $454.44, as investors moved to take quick advantage of the anticipated strong demand for the company’s shares. At that price, Apple’s market capitalization stands at about $418.8 billion, doubling Wal-Mart’s market value and just beating out Exxon Mobil’s.
Apple’s robust performance today stems from the record-breaking sales the company generated in the fourth quarter (its fiscal first quarter). During the period, Apple posted $46.33 billion in revenue and a record profit of $13.06 billion. iPhone sales jumped 128 percent year over year to settle at 37.04 million units, while iPad sales rose 111 percent to 15.43 million units. Apple’s Macs got into the mix, too, soaring 26 percent to 5.2 million units sold.
But Apple’s worth to shareholders is going past just gross sales and income. the corporate includes no debt on its books, in keeping with its latest Securities and change commission filing, and it has $97.6 billion of money to be had. In other words, it has no actual liabilities to fret about, and it has all the cash it needs to do, neatly, the rest it wants.
The only question is, what will the company actually do with it? For years now, investors and industry observers have been calling on Apple to spend some cash–on dividends back to shareholders, for example–but so far, it has kept the vast majority of those funds in its coffers.
During the previous day’s earnings call, both Apple CFO Peter Oppenheimer and CEO Tim prepare dinner said that they are inspecting all uses of the cash, together with improving the supply chain and tasty in strategic acquisitions. then again, Oppenheimer advised that Apple is not letting it burn a hollow in our wallet.
Regardless of what Apple does with its cash, analysts, who are most concerned with the company’s health and future performance, are extremely bullish on the company’s shares. Sterne Agee analyst Shaw Wu wrote in an investors note today that Apple is still a worthy buy for investors, and could see its stock price jump to $550 within the next 12 months. JP Morgan analyst Mark Moskowitz is even more convinced of Apple’s potential, saying he believes the company’s shares could soar to $625 by the end of the year.
We think that underlying strength related to iPhone and iPad market penetration has staying power, which is why we are lifting our Dec 2012 price target to $625, up from $525, Moskowitz wrote to investors. In our view, the December-quarter beat was stunning on many levels.