Apple Nears $4T: still in right-hand lane, $255–$258 the new bull/bear pivot

Esther_Ryan
10-22

$Apple(AAPL)$ stock hit new ALL TIME HIGHS for the second time in 2025, and all in a week.

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iPhone-17 build-order surge + Apple Intelligence pay-wall buzz + the $4 trln market-cap magnet are aligning; $Apple(AAPL)$ ’s momentum is still in the right-hand lane, with $255–$258 the new bull/bear pivot.

Ticker snapshot:

  • $Apple(AAPL)$ $262.90 (+1.7%, ATH $263.47 intra-day), YTD +38% vs SPX +22%.

  • Market cap ≈ $3.94 trln—only 1.5% away from the historic $4 trln level (≈ $267.2/sh).

  • $65 bn buy-back firepower left = 2.4% of float, EPS tail-wind ≈ 2.8%.

Catalysts in plain English

  • Hardware: iPhone 17 supply chain lifted to 92 mn units (+12% YoY); Pro Max mix 48% = +$5–6 ASP.

  • AI money: Street’s base case is 8% take-rate for a rumored $19.9/mo Apple Intelligence tier—adds 3-4 ppt to FY-26 Services growth.

  • Capital return: Net-cash zero by FY-26 Q1; another $70–80 bn repurchase authorization expected at the Nov meeting.

Chart & flow

  • Volume 10% below 3-yr mean = institutional lock-up.

  • RSI 72, MACD still rising but flattening; gamma flips negative 265–270.

  • Resistance 265 / 267 (options + psychology); support 258 (20-d) then 255; lose 252 and algos likely unload to 245–242.

Valuation

  • Street FY-26 EPS $7.55 → 34–35× P/E (10-yr avg 28×, 2020 peak 42×).

  • Bull case (15% AI attach, +4% ASP) → $8.20 EPS → $290–295 DCF.

  • Bear case (units –5%, AI regulation) → $6.90 EPS → $230–235.

  • Mean target $290 (Loop $315, Wedbush $310, $Goldman Sachs(GS)$ $279, $Morgan Stanley(MS)$ $273, $Bank of America(BAC)$ $256).

Risk list

EU side-loading rules, Korea OLED/Taiwan 3 nm geo-shock, DOJ App-Store break-up (≈25% of Services at risk).

How to play

  • Momentum traders: stay long above $255, stop $252, first tgt $267, second $275; add CALLs on a weekly close > $267.

  • Long-term holders: wait for 31 Oct Q4 call—look for FY-26 buy-back hike & AI ARPU guide before paying 30–32×.

  • Option sellers: 30-day IV 28% (<1-yr 31%)—consider 235/270 short strangle, but gamma-hedge the $4 trln headline.

Bottom line
Four trillion isn’t a ceiling, it’s a sentiment option; unless Apple Intelligence turns the AI story into durable Services revenue, today’s multiple is a one-time expansion.

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Comment（6）

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  • Valerie Archibald
    ·10-23
    Apple Introducing the new 14-inch MacBook Pro. Supercharged by M5. The new 14-inch MacBook Pro with M5 joins the 14-inch and 16-inch models with M4 Pro and M4 Max.
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  • Megan Barnard
    ·10-23
    Apple’s $65B buyback’s a safety net—keeps EPS padded nicely!
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  • Ron Anne
    ·10-23
    Loop’s $315 target leans hard into iPhone 17’s China sales pop!
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  • Wade Shaw
    ·10-23
    AI’s $19.9 tier—8% take-rate: too low or already priced in?
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  • Venus Reade
    ·10-23
    Apple will be $1000 eventually

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  • EarlBoyle
    ·10-22
    Great analysis! Apple’s fundamentals look strong, but keep an eye on those regulatory risks.
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