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- RBC analysts have raised their price target for Apple to $ 171 down the street, marking a 25% march after Friday.
- The technology giant could unlock a million-dollar business by opening its Wallet app for crypto-commerce, RBC said.
- Apple could lure users to the service by buying $ 1 billion in bitcoin itself, the team added.
- See here how Apple trades.
Apple shares could jump above current levels as the technology giant takes its first step into the cryptocurrency market, RBC Capital Markets said on Monday.
Analyst Mitch Steves raised RBC’s price target for the iPhone maker to $ 171 from $ 154 in a note to customers, which means a 25% increase over Apple’s Friday closing level. The target is now the highest among Wall Street analysts. Steves also maintains a better performance than the stocks.
While most of the news surrounding Apple’s future offerings has recently focused on a potential electric car, RBC sees more imminent opportunities in the company’s reckless Wallet application. Apple has expanded the app over the years and recently made its debut in 2019 with the Apple Card in financial services.
Wallet is already contributing to Apple’s increasingly robust services business, but an expansion in the crypto sector could make it an even bigger blessing, RBC said. Opening the Wallet app for buying and selling cryptocurrency could instantly confirm Apple as a leader in the industry and boost its services revenue.
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“If the company decides to engage in the crypto exchange business, we think the company can immediately gain market share and disrupt the industry,” RBC said, adding that it could help the US become a leader in crypto over the next 10 to 20 years.
Apple traded about 0.6% lower at 2.45pm on Monday. Shares opened sharply lower before later turning positive in a short time and getting the rise in the price.
Going into crypto is already a proven money maker. Square generates $ 1.6 billion per quarter through bitcoin revenue from its approximately 30 million active users. Apple has an installation base of about 1.5 billion people, indicating that the company could earn up to $ 40 billion a year from a Wallet-based crypto exchange, according to RBC.
The development cost for the $ 1 billion revenue stream will be minimal, the team added. Square’s total R & D budget is less than $ 1 billion.
Apple could increase the move to the crypto industry by buying $ 1 billion in bitcoin for itself, analysts added. The move will attract more users to the wallet on Wallet and likely increase bitcoin prices, they added.
Such a purchase is not unheard of. Tesla announced on Monday that it had bought $ 1.5 billion in bitcoin, saying the token “offers more flexibility to further diversify and maximize the return on our cash.” The popular crypto-currency jumped above $ 44,000 on Monday for the first time ever on news of Tesla’s purchase.
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