Gene Munster sees great long-term upside potential for Apple shares

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• Gene Munster: iPhone 14 “not particularly earth-shattering”, but ensures stable business
• Growth expected by entering new market segments
• Munster thinks Apple’s stock could climb to $250

On September 7th, Apple introduced some new products as part of the September keynote. Gene Munster, Apple expert and founder of the hedge fund Loup Ventures, spoke to “CNBC” in the run-up to the event of the “typical lineup” with new iPhones and Apple Watches and at the same time certified that the iPhone 14 was “not particularly earth-shattering”. The impact of the new standard products on Apple’s business should be “quite muted, but enough to keep this train going,” the expert said a few weeks before the event in an interview with the TV station. Nevertheless, Munster expects “nice growth” for Apple from the products presented – but he sees the real growth drivers, which will catapult Apple shares far up, in another area.

Apple with stable core business – looking for growth

Apple has a “great stable business” because, according to Munster, 70 percent of the products offered by the US company can be counted among everyday goods. Only 30 percent of Apple products are consumer discretionary. According to the managing partner of Loup Ventures, this product mix ensures that Apple itself does not have to fear an economic downturn too much.

However, Munster warned on “CNBC” on the other hand that Apple – apparently based on annual sales – is a 400 billion dollar company and therefore has to ask itself how it can continue to grow. Because the same principle applies to the company from Cupertino as to all tech companies: either you grow or you die. However, in the sectors in which the group around CEO Tim Cook is currently active, the growth potential has probably already been largely exhausted. So where is Apple’s continued growth supposed to come from? “The answer is, you bet on big markets, and those big markets are things that excite investors,” Munster said. It is clear to him that Apple can only grow if the group enters new markets.

According to the expert, however, Apple is currently developing a number of products that can be used to open up new market segments. Munster cites the healthcare, augmented reality (AR) and automotive sectors in particular, in which he sees particularly high growth potential. “Each of these three areas has the potential to create a measurable impact,” Munster told CNBC. The potential in the car market is likely to be particularly high. “It’s a huge market, $2.5 trillion a year. The smartphone market is about $1 trillion a year. The car could be bigger than the iPhone,” said the Loup Ventures founder. If the rumors that have been circulating for years finally become reality and Apple presents its own car, he believes that Apple shares should then quickly move higher.

Munster sees huge price potential in Apple shares

In fact, the expert still has a lot to do with Apple shares over the next few years. Because the development of new market segments would solve the growth problem in the long term and that is not yet included in the current share price. “I think there’s still measurable upside, I’m thinking more than 40 percent upside over the next few years,” Munster said. He set his target price at “about $250.” Based on the last closing price of Apple shares at 154.46 US dollars, that would even be an upward potential of a good 61 percent (as of the closing price on September 8, 2022).

Editorial office finanzen.net

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