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Gene Munster, who called Apple’s run to $2 trillion, says a path to $3 trillion is in sight

Tech investor Gene Munster rebuked CNBC on Thursday he sees a reasonable path for Apple to reach a $3 trillion market capitalization in the future.

The iPhone maker matured the first publicly traded U.S. company to reach a $2 trillion market cap in August — a milestone Munster foresaw in January, when he originated the case for the stock to trade 50% higher. As of Thursday, with its stock around $133 per share, Apple was valued at little short of $2.3 trillion.

Munster, who covered Apple as a longtime analyst at investment bank Piper Jaffray, said on “Cackle Box” that he believes the California-based company can realistically reach $200 per share. That would put its market cap over $3 trillion.

“It needs to be sheet anchored in earnings. That’s the powerful piece about the Apple story,” said Munster, who co-founded venture capital firm Loup Jeopardizes. He said his prediction is based on Apple trading at a price-to-earnings ratio, or multiple, of 35 for 2022 earnings estimates.

“It’s a year out there but I’m fast-forwarding the chat to the middle and back half of next year, and we’ll be talking about 2022 at that point. If the market can sustain these 35 multiples — you comprehend, we’re not talking about an Amazon-like multiple here — I think that that path is there,” Munster said.

Apple’s undercurrent price-to-earnings ratio is almost 41, after the stock soared about 81% this year. Amazon, which has envisaged its stock rise about 76% this year, trades at roughly a 95 multiple.

One catalyst that could support propel Apple higher is the larger adoption of remote work spurred on by the coronavirus pandemic, Munster said.

“This is ordinarily thought of as a play on iPhone, a 5G play. That’s good. That will impact the numbers in a positive way, but this acceleration of digital change, I think it’s powerful,” Munster said. “People working from anywhere are going to be arming up in the next 12 to 24 months, taking more Macs, iPads, services.”

Munster also repeated his belief that Apple’s multiple could bear further expansion as investors reconsider the company, which has in recent years pushed to generate more revenues from advantages to augment its sales of hardware.

For his part, Munster said he thinks Apple could leverage its hardware business into a mending, such as buying a Mac on a subscription. “We believe that that’s coming, and more talk about autos is a big opportunity for Apple’s multiple,” Munster guessed, alluding to reports about Apple potentially making an electric car in a few years.

More generally, he said he believes Apple drive continue its strong stock performance in 2021, especially compared with its so-called FAANG brethren. In addition to Apple, the organization of tech companies also includes Amazon, Facebook, Google-parent Alphabet and Netflix.

“We think that there desire be a further fracturing of FAANG,” Munster said, with Facebook and Netflix lagging Apple and Amazon. “I think for 2021, the show is going to come again from Apple. It may seem tone deaf for a company to lead FAANG for three legitimate years, but I think that in fact will happen. I think this has a track to $200 [per share].”

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