Speaking in a live interview with the host of CNBC’s “Squawk on the Street” Monday morning, Author, TV personality, and ‘Mad Money’ host, Jim Cramer, expressed his sentiments that Apple’s services business — which includes entities like iCloud, Apple Music, iTunes, the App Store, and even in-store device repairs — will eventually be worth as much as a Fortune 100 corporation, in and of itself.
“I still continue to think it’s undervalued,” Cramer said, referring to the company’s stock (NASDAQ: AAPL), while adding that a “Buy” rating placed on the surging, $132/share company by investment firm, UBS, is a clear indication that investors will soon realize the true value of Apple’s services.
iDrop News was first to report back in April of last year that Apple’s services business, according to well-connected Piper Jaffray analyst, Gene Munster, could ultimately be worth as much as $260 billion all on its own — and moreover, that this number will likely continue to swell, as we progress into the years ahead, and even newer services begin to trickle their way into the hands of users.
UBS’ research note, which proceeded Cramer’s comments on Monday morning, suggested that investors should be bullish on the Silicon Valley tech-giant’s overall outlook, and continue purchasing shares — even though they have surged from their December, 2016 levels of around $109 apiece, and are now trending at about $132 — an increase of about 18% in just the last 2 months.
UBS analyst, Steven Milunovich, in Monday morning’s research note, suggested that although Apple’s ‘bottom-line’ is predominantly “tied to hardware” — with the company’s iPhone representing as much as 63% of its annual revenue stream, the company’s services business is more than likely undervalued, adding, for comparison’s sake, that if Apple’s services were valued similarly to those of PayPal, Cupertino’s “stock would be at least 10% higher.”
During the same interview, Cramer also weighed in on all the clamor surrounding Apple’s hotly-anticipated iPhone 8, which he expects to be released during the same September timeframe as a number of previous iPhone launches, and said that he remains optimistic that the device will only add to Apple’s bottom-line.
“This is the first time that I felt that Apple has something that would make it so we really could be surprised by what it is,” Cramer said.
Apple’s iPhone 8 — along with two new ‘iPhone 7s’ models — are likely to make a huge splash when they’re released later on this year, indeed. And when we factor in the new iPad models, and all the new Mac computers that Tim Cook says are looming just over the horizon, it very well may be that Apple’s stock — even at $132 per share — is still far below what it will be come the end of the year. And, of course, let’s not forget about the other cool products that are rumored to be coming soon.