Apple (AAPL) - Get Apple Inc. Report shares extended gains Tuesday, putting them within touching distance of a fresh record high, after noted analyst Katy Huberty of Morgan Stanley boosted her price target on the tech giant to the highest levels on Wall Street.
Huberty, one of the tech sector's top-rated analysts, raised her price target on Apple by $36, to $200 per share, while keeping her 'overweight' rating in place, noting upside potential from its nascent autonomous driving division as well as the planned launch of augmented and virtual reality products such as headsets and glasses.
Bloomberg news reported last month that that the world's biggest tech company is accelerating its plans to build a self-driving car, and could unveil its debut model as early as 2025, while Wedbush analysts Dan Ives, a long-time Apple bull, told TheStreet in August that a so-called Apple Car is "not a matter of if, it’s a matter of when."
Huberty also shrugged-off recent reports of waning iPhone demand heading into the holiday season, noting that handset and App Store revenues could surprise to the upside in the December quarter.
“Despite a consistent and material revenue contribution from new products and services over time, Apple shares don’t seem to bake in the impact from upcoming new product launches,” Huberty said. “We believe this will change as Apple approaches the launch of an AR/VR product over the next year.”
"We know Apple is working on products that address two significantly large markets -- AR/VR and autonomous vehicles -- and as we get close to there products becoming a reality, we believe valuation would need to reflect the optionality of these future opportunities," she added.
Apple shares were marked 3.6% higher in early late-morning trading Tuesday to change hands at $171.20 each, a fresh all-time high that values the group at $2.81 trillion.
At $200 per share, Apple's market cap would exceed $3.2 trillion. Apple, the first American company to earn a $2 trillion valuation, passed the peak in August of 2020.
Apple said profits for the three months ending in September, the tech giant's fiscal fourth quarter, were pegged at $1.24 per share, up 70% from the same period last year and bang in line with the Street consensus forecast, even as supply chain disruptions ripped $6 billion from its overall sales tally of $83.4 billion.
Apple's holiday quarter sales will also be hit by the chip shortage, CEO Tim Cook said in late October, telling Reuters that "we're doing everything we can do to get more (chips) and also everything we can do operationally to make sure we're moving just as fast as possible."
Still, CFO Luca Maestri told investors on a conference call that December quarter sales would be "very solid", and likely hit a record high, with gross margins in the region of 41.5% to 42.5%.