There are times when it pays to look years ahead when youre an investor. <\/p>\n
That time is now for Apple AAPL, +4.73% Under one scenario, Apples stock could double. At first glance, such a possibility seems ridiculous given current Wall Streets price targets on Apple. Isnt Wall Street often behind the curve? <\/p>\n
When I made the call to aggressively buy Apple at $18.71 for the very long term, I suggested that the stock could go to $143. This call was made long before Apple became a popular stock. Many called it outrageous; some even canceled their subscriptions to The Arora Report. Well, Apple is trading north of $150 as of this writing, and The Arora Report is still holding part of the original position bought at $18.71. <\/p>\n
No, I am not a genius to be able to pick an exact number like $143 to be achieved years later. I simply picked the round number of $1,000 as a potential target. Since then, Apples stock has split seven for one. And $1,000 divided by seven is $143. <\/p>\n
Let us explore how the stock might double. <\/p>\n
Five stages of a long trade <\/p>\n
Please click here to see five stages of a long trade. The diagram shows one cycle. In the recent past, Apple has gone through three cycles; first from the long side, then from the short side and once again from the long side. <\/p>\n
Please click here to see five stages of a short trade. <\/p>\n
At present, Apple is in the fifth stage marked as crowded trade in the diagram. According to the ZYX Change Method, we now have the first solid indication that at some time in the future, Apples stock may embark on another cycle of five stages to the upside. <\/p>\n
Please note that the first stage is marked as change not recognized. This is where the highest alpha trades are entered. In plain English, alpha simply means generating excess returns. The potential change is not in Wall Streets analysis. <\/p>\n
Artificial intelligence <\/p>\n
Apple CEO Tim Cook said Tuesday: In terms of autonomous systems, what weve said is that we are very focused on autonomous systems from a core technology point of view. We do have a large project going and are making a big investment in this. From our point of view, autonomy is the mother of all AI [artificial intelligence] projects. And the autonomous systems can be used in a variety of ways, and a vehicle is only one. But there are many different areas of it, and I dont want to go any further with that. <\/p>\n
Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora. <\/p>\n
Obliteration of the case against Apple <\/p>\n
As well as Apples stock has performed, it has always been constrained by the fact that it is primarily a one-product company. Yes, Apple has many products. However, over 70% of its profits have been generated by only one product: the iPhone. One-product companies are inherently risky. <\/p>\n
From Cooks statement, now we are seeing concrete signs that Apple may end up with at least one other big hit using artificial intelligence on par with the iPhone. If this happens, not only will the stock be driven higher by excitement, but analysts will likely raise their targets as they give the company a higher price-to-earnings multiple. <\/p>\n
As a note of caution, please remember that not all good scenarios come true. For this reason, investors need expert guidance. <\/p>\n
The best investment opportunities <\/p>\n
The best investment opportunities are likely to come not in Apple, but in two other categories. <\/p>\n
First is Apple suppliers. Following Apples good earnings report Tuesday, its suppliers stocks are gaining: Cirrus Logic CRUS, +0.46% Skyworks Solutions SWKS, +0.14% Broadcom AVGO, +2.00% Qorvo QRVO, -1.78% Analog Devices ADI, -0.16% and Micron Technology MU, +1.02% <\/p>\n
The second category is artificial intelligence. The crowd favorites are Nvidia NVDA, -0.06% and Advanced Micro Devices AMD, -2.48% Most of the cutting-edge artificial-intelligence work is being done at companies such as Alphabet GOOG, -0.05% GOOGL, +0.11% Facebook FB, -0.33% and Microsoft MSFT, -0.44% However, those companies are too big to present the best opportunities for investments. <\/p>\n
At The Arora Report, we are working hard to identify the best companies to invest in this theme that are not too big and not already too crowded like Nvidia and AMD. <\/p>\n
What to do now <\/p>\n
There is strategy and there are tactics. This article is about strategy. Please stay tuned for an article in the future about the tactics. Tactics include when to buy or add, how much to buy and when to sell. <\/p>\n
Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. All recommended positions are reviewed daily at The Arora Report. <\/p>\n
Nigam Arora is an investor, engineer and nuclear physicist by background, has founded two Inc. 500 fastest-growing companies, is the developer of the adaptive ZYX Global Multi Asset Allocation Model and the ZYX Change Method to profit from change in trading and investing. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com<\/a>. <\/p>\n <\/p>\n Visit link: <\/p>\n Opinion: Apple's stock could double on the 'mother of all artificial-intelligence projects' - MarketWatch<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" There are times when it pays to look years ahead when youre an investor. That time is now for Apple AAPL, +4.73% Under one scenario, Apples stock could double. At first glance, such a possibility seems ridiculous given current Wall Streets price targets on Apple Continue reading