Apple Inc, the designer and ultimate manufacturer of iPhones, Mac computers, iPads and the seller of various services connected to these devices had its stock market capitalization double in the last trailing year to 1.32 trillion USD.
Two of the main factors driving the rise of Apple's stock price were there relative undervaluation one year ago and recently future expectations of good sales of iPhone 11 and possibility of pending recovery of Apple products sales in China.
But is Apple overvalued at its current 1.32 trillion USD stock market capitalization? Yes, Apple is overvalued by circa 30-40%. The market is pricing just too much growth for Apple Inc. Yes, I know Apple's services revenue is rising, but still around 70% of Apple sales come from hardware. And I doubt many people will use Apple's services if they do not own one of Apple's devices. What is more, there seems to be priced in the market too much optimism for the global economy on which Apple depends to sell its products, since basically Apple's products are premium/expensive products. Apple needs the global economy to do good, in order for Apple to sell its pricey products successfully. And a global economic recession is looming, if not in 2020, then in 2021 or 2022.
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Petar
Vladimirov Posledovich is not liable for any investment losses incurred
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Respectfully yours,
Petar Posledovich
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