Nine days after Apple (AAPL) blasted through earnings estimates, the stock is performing better than the market overall -- a sign that about the only thing that can knock the stock down is financial panic.
In fact, the one certainty about Apple right now is that it's hard to find anyone who thinks there's something wrong with the company or the stock. The one issue that's been able to knock Apple shares lower have been concerns about CEO Steve Jobs' health.
The stock is up 23% this year, and there are projections that it will overtake Exxon Mobil (XOM) as the world's most valuable company in no more than 12 months. Exxon's market capitalization is about $406 billion; Apple's is $366 billion.
Nicholae Mihalache, a Romanian mathematician who teaches at the University of Paris, told CNN Money he thinks Apple shares could hit $550 next year and $850 by the end of 2013. The stock hit $400 a share on Monday and reached an all-time high of $404.50 on Tuesday before closing at $403.41. The Dow Jones industrials ($INDU) lost nearly 180 points on those two days. On Wednesday, the Dow slumped 199 points, and Apple fell back to $392.59.
Today, Apple is up 1% to $396.48, contributing nearly 3.5 points to the 30-point gain of the Nasdaq-100 Index ($NDX.X). It's up 4.8% from its July 19 close -- before the company released its fiscal-third-quarter profits. The Nasdaq-100 is down very slightly from its July 19 close; the Dow is off about 1.9%.
So far, Apple's biggest problem is making enough iPads, iPhones and Macintosh computers to satisfy the demand. IPhone unit sales were up 142% from a year ago. IPad sales were up 150%. And the iPhone has a new model coming out probably in mid-September. The company is likely to generate more than $100 billion in revenue in the current fiscal year.
Sure, Apple could saturate the potential market for iPhones and iPads. But it may take some years and new products that supplant them.
The iPod is instructive here. Sales of iPods have been slipping. Unit sales were off 20% and revenue of $1.32 billion was down 14% from a year ago. Weep not for the iPod, however. It's still a pretty good business with sales of maybe $5.2 billion.
And even if the iPod business isn't growing, its legacy is easily assured. The iPod started Apple's transformation from a cool maker of computers to a cool maker of gadgets and computers. That's why the company changed its name in 2007 from Apple Computer to simply Apple.
When it comes to smartphone sales, Apple is in a pretty tough dog-fight. Phones built on Google's Android platform are ramping up, but none has a brand name that's as instantaneously recognizable as iPhone -- which, by the way, is a $50-billion-a-year business by itself. And the iPhone's cachet is that there are millions of aps that go along with it.
At the same time, the iPhone has devastated the image of Research In Motion's (RIMM) BlackBerry as a must-have device. RIM sales are still climbing, but profit margins are shrinking, and the company's management structure is under fine. The stock is off 55% this year alone.
And the iPad is fast turning into a must-have gadget that developers have turned into something business can use. Since Apple invented the tablet, no one has come close to creating a competitive product. Doctors use it to upload X-rays and medical records. Apple is using what it's learned from the iPad to design a new ultralight Mac computer that may compete with offerings from other computer makers.
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