Apple to hit $3-trillion market cap in 2022, LA investment firm Wedbush expects

• Apple needs to rise around 6% to cross $182.81 to become the first company to hit the $3 trillion market cap

• Morgan Stanley raised Apple’s price target from $164 to $200

Apple Inc could hit a $3 trillion market value in 2022, or bigger than the economy of the United Kingdom, according to Los Angeles-based investment firm Wedbush Securities.

Wedbush analyst Daniel Ives has an outperform rating and $175 price target on the company, with the bull-case price target at $225.

The Cupertino giant needs to rise another 6% to cross $182.81 to become the first company to achieve the milestone, to which Ives told CNBC that he thinks will happen within the next 12 to 18 months.

The iPhone maker jumped more than 2% to $ 174.87 on Wednesday in the New York trading session, hitting the market cap of $2.87 trillion.

$200 a share price target

Morgan Stanley on Tuesday raised Apple’s price target from $164 to $200 and maintained the equivalent of a buy rating.

However, Katy Huberty, the MS analyst, mentioned that the new expected products from the company, like an augmented reality headset or self-driving car, weren’t considered while raising the price target.

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The share of the Cupertino giant jumped more than 3.5% on Tuesday, reaching a new all-time high.

Apple crossed the first trillion-dollar market cap in 2018 and the $2 trillion mark in 2020.

Earlier this year, investors dumped the stocks following a historic December quarter.

Software services

Apple has been viewed as a hardware company for years until the current CEO, Tim Cook, started pushing the narrative that the firm’s iOS operating system has a services ecosystem since 2018.

Ives told CNBC that at the moment, the company is laying the foundation for the next stage of growth where software and services play essential roles, which is built around a base of more than one billion Apple device users.

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Ives values Apple’s software services business at about $1 trillion currently and expects it to increase to about $1.5 trillion, which would help the company to hit the market value of $3 trillion.

Risks to $3 trillion target

However, according to Ives, several potential risks could hinder Apple from reaching the milestone, including a court battle with Epic Games, maker of the video game Fortnite, where Cook faced questions from the judge last month.

Ives also pointed to growing regulatory scrutiny around the world.

In April, The European Commission said that Apple “abused its dominant position” in distributing music streaming apps through its Apps Store, in another lawsuit that Spotify filed.

Moreover, for the first time in more than a decade, Apple had to halt production for its iPhone and iPad “for several days,” before the holiday season after facing supply chain limitations and China’s ongoing power restriction, Nikkei reported.

The company has also told its parts suppliers that demand for its flagship iPhone 13 lineup has weakened, Bloomberg reported last week, indicating that the supply chain issue has somewhat dented Apple’s hardware business.

Picture Credit: Finbold