This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Apple Could Race to $130 After Jumping These Three Key Hurdles

Stocks in this article: AAPL GOOGL

NEW YORK (TheStreet) -- Investing in Apple (AAPL) now requires a lot of courage. But if Apple can overcome three key hurdles, the stock will once again prove its mettle and have unlimited wind at its back. Target price: $130 and higher by May 2015.

Here are the key obstacles investors need to worry about: First, Apple hasn't released a "brand new" product in several years, and its best-selling iPhones, iPads and Macs have reached or are approaching their market-share limits.

Second, the long-rumored iPhone 6 and fabled iWatch are just mirages so far. Although most analysts are optimistic that these two products will eventually manifest in a big way, they could still disappoint consumer expectations.

Read More: How Apple’s iWatch Can Help Wearables

Last, Apple faces strong competition from Google's (GOOGL) many Android allies in the global market (Samsung, LG, HTC and Sony). Android-powered smartphones are currently No. 1 in worldwide growth, grabbing 81% of market share in first-quarter 2014 vs. Apple's 15%, according to the International Data, a marketing research firm.

So, why think Apple can triumph over these intimidating barriers? Look to its ever-evolving i-ecosystem.

Apple reported its third-quarter earnings last month, and the results were in line with what most analysts expected. Earnings of $1.28 per share were 5 cents better than the Capital IQ consensus estimate of $1.23. Revenue also rose 6.0% year on year to $37.43 billion vs. the $38.02 billion consensus. The company issued downside revenue guidance for the fourth quarter, forecasting revenue of $37 billion to $40 billion vs. $40.46 billion estimates.

The language that CEO Tim Cook used was predictable: We see some growth here and slowdowns there (primarily in iPad sales). Developing countries like the BRICs (Brazil, Russia, India, and especially China) are keeping iPhone sales high, and we have some "exciting" products in the pipeline.

Let's say Apple does debut a splashy, large-screen iPhone in September (the same launch month for all previous iterations). It will be a game-changer.

Most consumers judge phones by screen size and high-tech bells and whistles such as HD cameras and faster processors. A large-screen iPhone with a fast processor would close the size gap between Apple and its Android rivals and attract huge demand.

As for Google, the Android team is analogous to the European Union, which is united by the euro. But in this case it's an operating system, cannibalized by its brother-and-sister brands.

Read More: Apple’s Ho-Hum Quarter Is a Setup to Its Biggest Product Launch

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs