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Apple (AAPL) 2025 stock forecast is driven by new cars
Virtual reality/augmented reality headset
Can Apple cars become the next growth driver?
Apple's previous projects
Apple has changed consumer electronics products in the past by launching the Mac, iPhone and Apple Watch. Analysts believe that its next large-scale product may appear in the form of virtual reality (VR) headsets, augmented reality (AR) glasses, and fully autonomous vehicles.
Apple has maintained a high degree of confidentiality for these new projects-the company has neither officially announced nor commented on them. However, analysts speculate that new VR/AR products may be released as early as 2022, and fully autonomous vehicles are expected to be released around 2025.
If the company implements these efforts, it may have a huge impact on Apple's stock forecast for 2025 and bring the world's largest company into the highly competitive and fast-growing virtual reality and self-driving car market.
Apple's stock price hit a record high on Wednesday, reaching US$168.45 per share, and the company's valuation is US$2.75 trillion.
According to MarketBeat's data, at this price, the technology giant's transaction price is about the average 12-month Apple price target consensus of 30 analysts covering the company.
However, the analyst did give a wide price range, predicting between US$198 and US$90.
Analysts did not make a forecast for Apple’s stock price in 2025, but Morgan Stanley analysts said that they expect revenue to grow by 6.0%–7.9% in the next three years, reaching $448.1 billion by the end of fiscal year 2024, which is higher than that. The company’s latest report of $365.8 billion is based on reports provided to Capital.com in October earnings.
According to a report obtained by Capital.com, Goldman Sachs analysts are not so optimistic and expect revenue to grow to $370.4 billion by September 2024.
Goldman Sachs said it expects that by the end of 2024, earnings per share (EPS) will drop slightly from US$5.61 in the most recent quarter to US$5.54.
Next year, as the company invests in these new projects to drive longer-term growth and respond to supply chain disruptions, earnings per share are expected to fall to $5.20.
According to a report sent to Capital.com, Wedbush analyst Daniel Ives expects full-year earnings per share in 2023 to increase to $5.99, up from $5.61 for the 2021 fiscal year ending in September.
Please note that the analyst's forecast may be wrong. Forecasts should not be used as a substitute for your own research. Always conduct your own due diligence before investing. Never invest or trade losses that you cannot afford.
Several companies, including Microsoft, Sony, Samsung, Alphabet, and Meta, have released virtual reality headsets with varying degrees of success, and these companies still believe that there is more room for growth in this field.
As early as 1996, Apple expressed interest in virtual reality headsets, when it applied for the first patent in the field. But these efforts have greatly increased in the past six years. According to reports, the company has hired hundreds of employees to participate in the project and acquired augmented reality startups such as Metaio.
It's official now: #Apple has purchased #Metaio. pic.twitter.com/FGrvm8jbY6
The first project is expected to be a complete VR/AR headset, also known as a mixed reality headset, similar to a competing product of the Meta headset (previously known as Oculus or Microsoft's HoloLens).
Ming-Chi Kuo, an Apple analyst at Asia Pacific financial services company TF International Securities, said that Apple's unnamed headset is expected to be released at the end of 2022 or early 2023.
The second, smaller augmented reality project is similar to the once hyped Google Glass project, and Apple is also in development.
Kuo said the project is still in the early stages of production-even earlier than larger headphones.
It is said that the glasses have displays on both lenses, which can be interacted with by gestures. They will be sold as accessories for the iPhone, which will handle most of the computing, networking, and positioning of the headset.
According to financial news service Nikkei Asia, Sony and TSMC are said to be cooperating with Apple on display technology.
Some sources said that the glasses may come out in 2023 at the earliest, but Guo said that the expected release date is 2025.
According to Bloomberg, in November last year, it was reported that Apple reshaped its car ambitions, focusing on building a fully automatic electric car without a steering wheel.
As early as 2014, Apple began to work on its own car design, called Project Titan. By 2016, there were rumors that Apple completely shelved the project, but resumed it in 2020.
The technology giant is looking for two possible vehicle designs: one with a more traditional design with limited autonomous driving capabilities, and the other with fully autonomous capabilities and no driver's seat.
In November last year, there were reports that Apple was taking the latter path and designed a chip that could power the vehicle and make it highly compatible with other devices, including the iPhone.
The success or failure of the car is critical to Apple's stock price in 2025.
However, Apple does not have the manufacturing capacity to make its own cars and is looking for partners to handle production.
Ives added that Apple has an 85% chance of announcing a car partnership in the next few years, which will allow it to make its own electric cars sometime after 2025.
UBS analyst David Vogt pointed out in a report provided to Capital.com that at the end of November, Apple obtained two automotive-related patents.
The first patent "System with Window" is a power window, which uses infrared light blocking coating and anti-reflective coating that can block heat. The second patent "suspension system with locking structure" is a function to lower the body when passengers enter and exit.
Many companies are studying electric vehicles and autonomous driving systems, including Tesla, Ford and Google's Waymo. But only General Motors is actively and openly developing a fully automatic car without a driver's seat.
Cruise, a self-driving subsidiary of General Motors, is developing a self-driving car called Cruise Origin, which is expected to drive on selected roads in the next few years.
According to a report by General Motors at the Investor Day held in October, by 2023, General Motors intends to start increasing the production of Origin and its fully automatic Chevrolet Bolts in order to achieve its goal of generating US$50 billion in revenue by the end of the year.
Alphabet’s Waymo is expanding its self-driving service to San Francisco, where customers can order a fully self-driving car, which is supervised by a person in the driver’s seat and can be taken over if necessary.
Although Apple has a place in game-changing products, not all products it releases have reached these heights.
Despite Spotify's success on iTune in the early 2000s, Spotify is still the most important music streaming platform, with more subscribers than Apple Music.
Similarly, its video streaming platform Apple TV+ has achieved some success in shows such as Ted Lasso, but it is still looking for fierce competition from Netflix, HBO, Amazon Prime, Hulu, Paramount Plus and many other streaming options Way out.
Similarly, its smart home speakers and video streaming media set-top box series cannot enjoy the sale of cheaper products provided by Amazon and Google. Other projects, such as TVs made by Apple planned by the late former CEO Steve Jobs, never made it into consumers' homes.
No one can know for sure. Morgan Stanley said that over time, Apple Car's revenue is likely to double, and by 2025, revenue is expected to increase by more than 22% over 2021. Goldman Sachs predicts that Apple's revenue will grow by 1.27% in the next three years. Apple's stock price forecast for 2025 may depend to a large extent on the success or failure of new products.
MarketBeat's data shows that analysts are basically optimistic about the outlook for Apple's stock and expect the stock to continue to rise in the next 12 months, or at least remain near historical highs.
It's hard to say after a long time. Since the 2008 financial crisis, the stock has soared by more than 2,600%, making it the world's most valuable company. However, past performance is not an indicator of future success.
Please note that the analyst's forecast may be wrong. Forecasts should not be used as a substitute for your own research. Always conduct your own due diligence before investing. Never invest or trade losses that you cannot afford.
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