The article was written by Aline Rzetelna, a Financial Analyst at I Know First. 

“What is Apple, after all? Apple is about people who think ‘outside the box,’ people who want to use computers to help them change the world, to help them create things that make a difference, and not just to get a job done.” – Steve Jobs

Apple Stock Forecast

Summary:

• • • Will Apple Be The First $1 Trillion Company?
    • Apple Shares Will Thrive Due To Tax Reform
    • I Know First Bullish Forecast for Apple

Apple Inc. designs, manufactures, and markets mobile communication and media devices to customers worldwide. The company also sells related software, services, accessories, networking solutions and third-party digital content and applications. Apple’s most famous product is the iPhone, a line of smartphones. Moreover, the company offers a line of tablets, iPad, and a line of desktop and portable personal computers, Mac. Furthermore, Apple developed operating systems comprising iOS, macOS, watchOS, and tvOS. Additionally, the company is also famous for its Apple TV, Apple Watch and iPod. Apple sells and delivers digital content and applications through the iTunes Store, Apple Store, Mac App Store, TV App Store, iBooks Store, and Apple Music. The company has more than 100,000 employees. Founded in 1977, Apple has its headquarters in Cupertino, California.

Will Apple Be The First $1 Trillion Company: What To Expect From The IPhone X Sales?

In 1984, Apple introduced the Macintosh, which revolutionized personal technology and kept Apple as the second largest PC manufacturer for the next decade. One of the biggest technology companies in the world, Apple is leading the race to become the world’s first $1 trillion company. Will Apple be the first to reach this goal?

With a market capitalization of $919 billion, as of January 17, 2018, Apple’s stock price in 2017 has increased almost 50%. 2017 marked the 10th anniversary of its most famous product, the iPhone, which accounts almost 80% of gross profits generated by the world’s smartphone industry.

Source: Google Finance

The celebration came with the launch of Apple’s most expensive smartphone ever, the iPhone X, an all screen smartphone, the first with OLED screen and the first to introduce the new Face ID technology. The TrueDepth camera, which allows the Face ID tech – a secure and private new way to unlock, authenticate, and pay -, revolutionized the recognition process by projecting and analyzing more than 30,000 invisible dots to create a precise depth map of the face.

Despite customer fury about the overpriced iPhone X and its low sales projections, the Californian firm has gained 17% of market share over the previous year after the launch. The curiosity of the iPhone X sales and revenues will persist until February 1st, 2018, when Apple will hold its investors call and will release its first quarter results.

Apple Shares Will Thrive Due To Tax Reform

The impending tax reform is expected to lower rates across corporate America. Therefore, Apple is also going to benefit from it. The company is expected to save $47 billion under the tax reform.

Many American companies prefers to keep the majority of its overseas earning outside of the U.S., instead of paying the 35% corporate tax rate that is charged to bring the money back home. Apple currently holds $252.3 billion cash overseas in foreign cash and investments. If Apple decides to repatriate all of that to the U.S., the company will have a reduction on its tax rate for overseas earnings to 15.5%.

The tax reform proposed by the White House and Congressional Republican leadership remove the incentive to keep foreign profits growing. The cash repatriation and lower tax rates brought by the tax reform are expected to have a bullish impact on the world’s largest market capitalization company.

Apple said it will use the overseas cash for US investments, investing over $30 billion in direct capital expenditures in the US over the next five years and creating 20,000 new jobs. According to the tech giant, this move would contribute with $350 billion in economic activity in the US. Therefore, the question that raises is how much of the potential tax savings will impact in APPL’s current share price.

I Know First Bullish Forecast on Apple

While we are still expecting the release of the first quarter fiscal 2018 results of APPL, I do believe that the company will present strong sales and revenues with the new iPhone X. Being in the first place of the race to be the first one-trillion-dollar company also ensures the strong outlook that surrounds Apple. Moreover, the impact of the tax reform, which will lower tax rates in the U.S. is also a positive indicator for an increase in Apple’s share price. Therefore, in accordance with the I Know First bullish forecast on Apple, I rate this stock as buy.

Past I Know First Success with Apple

On September 8th, 2017, an I Know First analyst released a bullish forecast for Apple supported by the I Know First algorithmic prediction system. According to him, the new iPhone X would find many eager buyers, once Apple has many loyal customers. Since then, in accordance with the I Know First bullish forecast, Apple shares are up 11.06%.

Current I Know First subscribers received this bullish forecast of AAPL on September 8th, 2017.

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

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