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The leaked news of the Apple (Nasdaq: AAPL) iCar is a big surprise. In the past, there has been speculation that Apple might get into the auto business. But it’s never been anything more than speculation.
The news from the WSJ is the first detailed report on the progress that’s underway. This also means that Apple clearly has its sights set on Tesla Motors (NASDAQ: TSLA).
Tesla proved several important things: 1) a consumer-driven tech company could build an amazing car, 2) Detroit’s product development was truly flawed, 3) great cars could be born in Silicon Valley, 4) electric cars could be beautiful, fun to drive and good for the environment, and 5) consumers want to buy electric cars.
It’s clear that Apple wants to get in on the action. The company has already been working on the connected car with its CarPlay solution, which links cars and smartphones.
Last quarter, Apple reported the biggest corporate profits ever. The company earned profits of $18 billion and saw its revenues jump 30%. The success of the new and bigger iPhone 6 was a big part of the company’s success.
In the wake of those strong results, Apple stock reached an all-time high of $127. Based on that price, the market value of the company has reached a staggering $740 billion. That puts Apple’s valuation at nearly double the next biggest company, ExxonMobil (NYSE: XOM).
New highs for Apple stock have encouraged questions about the future growth of the company. With each additional success, Apple will have to expand into new areas.
Just last week, commentators were asking what’s next for Apple stock. Some analysts have been skeptical about the future upside to Apple stock. They’ve said that even another great quarter of financial results wouldn’t justify a big increase in the stock price.
The problem is that most analysts only think of Apple as the maker of the iPhone and iPad. They have trouble imagining the Apple of the future. And therefore, their financial models can’t justify a much bigger valuation for the stock.
These skeptics ask how Apple could justify a $1 trillion market capitalization. The answer is not the iPhone 7 or the iWatch.
Instead, it’s a big innovation that breaks new ground that will propel the stock to new highs. As Tim Cook told Charlie Rose last year, “There are products that we’re working on that no one else knows about…that haven’t been rumored about yet.”
It seems that Project Titan and the iCar was one of those products.
As an Apple shareholder, I’m thrilled to hear the news of Apple’s expansion into the connected car market. Apple may never build its own cars. But last week’s news shows that Apple continues to push the envelope on innovation, and is committed to tackling big opportunities.
This latest news tells me what I’ve known for a long time: innovation at Apple didn’t die with Steve Jobs. The general public doesn’t know what’s happening inside Apple, but innovation is alive and well in Cupertino. With more positive surprises on the horizon, this stock should continue to reward investors.
What is Apple Hiding?
You’ll never hear about this from the 42 regular market analysts covering Apple – because either they don’t know about it… or they don’t want you to know about it. But Apple’s hiding a major secret from investors. See, all its most prized products – the ones everyone lusts after – would be utterly worthless without this one company. And there’s one other thing Tim Cook doesn’t want to let slip – especially to Apple investors: shares of this “secret” company do five times better than AAPL shares every time Apple launches a new product. Check out the full story now – click here.