Apple is on the verge of becoming a 3 trillion USD company.
Although Apple looks overvalued as things stand, the strategic alternatives before the company seem to be driving ever more both institutional and individual investors into buying Apple's stock.
The main growth vertical before Apple are Apple's services business opportunities and the potential to build an autonomous car.
While the essentially cloud based Apple services business has been thriving with high growth rates, higher than Apple's hardware margins and quick customer adoption, secured by the loyal user base of its hardware, it is in artificial intelligence, AI, powered autonomous cars where the future jumps in Apple's intrinsic value potentially lie.
Actually, the state of artificial intelligence or AI currently does not allow to build fully autonomous cars. AI currently has the cognitive potential of a two year child and this is optimistic. However, just the promise of such prospective AI developments drives huge increase in the market capitalisation of Tesla.
Only media rumours and mentions that Apple is building its own autonomous car cause Apple's stock price to increase significantly, at least according to many investment banks equity research analysts and media analysts.
Apparently, Apple would use the same approach to self-driving cars production as with its iPhones- it will just engineer, create sketches and design of the futuristic AI powered autonomous car and outsource the car parts production to established producers. Hyundai was mentioned as potential subcontractor to build the hardware parts for Apple's prospective self-driving vehicle.
Actually, I think producing television sets is another potential growth vertical for Apple. People are watching television longer nowadays than any other time in humanity's history and the TV viewers' engagement is quite strong. Apple could use its industrial design prowess to manufacture a piece of art television set, much like its Mac laptop, which I am using, and its iPhones and iPads which I am also a loyal and fond user of.
If Apple's autonomous car project and a potential Apple Television set, TV, get along to a certain stage, Apple's market capitalisation could even surpass 5 trillion USD in the next 5 to 7 years.
That said, however, I believe Apple's current intrinsic value is around 1.9 trillion USD, or with other words Apple is grossly overvalued.
Yes, I know Warren Buffett, arguably the most skilful investor of all time, holds more than 40 % of Berkshire Hathaway's investment portfolio into Apple stock. This, however, exposes Warren Buffett and Berkshire Hathaway to the proverbial "do no hold all your eggs into one basket" or low diversification risk.
And potential positive jumps in company value, could suddenly turn into negative jumps lower of a company's value.
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