2012 has been an extraordinary year for Apple’s stock. Shares in the company have been on a tear since it posted monstrous first-quarter results in late January that far exceeded Wall Street’s expectations.
On that day, AAPL was trading at $420.31. Now, six months later, it’s hovering around $602. That’s a jaw-dropping rally. At that price, Apple shares are up about 48 percent for the year. And bullish observers continue to predict they’ll hit $1,000 by the end of next year which would give Apple a market cap of $1 trillion.
That’s an awfully big valuation. Is it reasonable?
David Einhorn, founder and president of hedge fund Greenlight Capital, believes it is. During an appearance on CNBC this morning, Einhorn was asked if he sees Apple becoming a trillion-dollar company. His answer: “I would expect.”
“Apple is the best big-growth company we have,” Einhorn said. “It is the dominating brand in the area that it is in, and it trades at a multiple below the average in the S&P 500. I think that’s extraordinary.”
Einhorn professed himself to be an Apple bull, and he doesn’t see that changing anytime soon.
“We’re two, three years into the Apple investment, and the way it seems headed, it’s likely we’ll be there for a good while longer,” he said. “I think the stock is very, very substantially undervalued.”