Apple Stock: Will the Apple car be the ultimate ‘Tesla Earth? “
Last week we broke down Apple’s stock AAPL and its metaverse catalyst. Specifically, why the tech giant’s move to hardware AR (augmented reality) and VR (virtual reality) may at best only give stocks a slight boost.
Now let’s take a look at a potential catalyst that could be more of a needle driver: the company’s Apple Car project. If its development and launch is successful, it’s no exaggeration to believe that this fully autonomous electric vehicle (EV) could give prominent names in this space, like Lucid. LCID and Rivien RIVN, a race for their money.
Not only that, but the Apple Car could also have a chance to grab a substantial market share from current leader Tesla. TSLA. However, before placing a buy order, let’s take a closer look at this catalyst and its potential short- and long-term impact on Apple stocks.
(Learn more about Apple Maven: At the Winter Solstice, AAPL investors hope the darker days are over)
Stock AAPL and its Apple Car catalyst
Before we dive in, here’s a quick look at Apple and its EV project. For years, the company has been working on the development of an electric vehicle.
Previously, it designed both a limited autonomous vehicle and a fully autonomous vehicle. Working on both projects at the same time made sense. This would allow it to launch an EV before fully autonomous capacity becomes available.
But now, with a new leader in charge of the project (Kevin Lynch), Apple is putting all its eggs in the fully autonomous basket. Speeding up its timeline, the company is targeting a 2025 release date for its fully autonomous EV.
Given its track record, there are strong expectations that Apple will meet this deadline and release a potential “Tesla killer” in less than four years. However, that doesn’t mean it’s won in advance.
Apple Maven’s point of view
Unlike its metaverse catalyst, the Apple Car can offer much greater upside potential. As Morgan Stanley’s Katy Huberty argued in November, its launch of a fully autonomous electric vehicle could ultimately double both its revenue and market capitalization.
The seller-side analyst pointed out many factors supporting his case – the company’s large customer base, for example. In addition, there is Apple’s past success in delving into uncharted territory. For example, the company was behind in mobile communication devices when it launched the iPhone, but it currently has 23% of the market and is growing.
That said, while it has a good chance of success, the Apple Car could still hiccup as it moves into the delivery stage. In fact, it is already facing some hurdles right now, as recent news shows that the project has lost key engineers to rivals.
On top of that, with the AAPL stock already trading at a stretched futures earnings multiple, this catalyst may already be factored into its valuation. Ms Huberty sees EV as something that could one day double the share price. Still, its current price target of $ 200 per share is 20% lower than the $ 170 per share that AAPL is trading for today, suggesting that much of the rise in Apple Car stock may not be. not happen until 2022.
Bottom Line: The Apple Car can be something that helps the company and stocks achieve strong long-term financial results and market gains, respectively. At the same time, this might not give stocks a boost in the months to come.
(Learn more about Apple Maven: Apple Stock: 3 Key Facts Dip Buyers Should Know)
(Disclaimers: This is not investment advice. The author may go along with one or more actions mentioned in this report. Additionally, the article may contain affiliate links. These partnerships do not influence editorial content. Please support Apple Maven)