Apple’s (NASDAQ:AAPL) market cap will continue to rise beyond the $3-trillion U.S. milestone it hit briefly Monday, according to one chief investment officer, who argued that the stock’s valuation is justified.
Patrick Armstrong, CIO at investment management firm Plurimi Group, expects Apple’s share price to continue to grow quicker than the overall economy. The International Monetary Fund expects the U.S. economy to grow by 5.2% in 2022, while the global economy is seen expanding by 4.9%.
“I don’t think it’s going to be a stock that’s going to double very quickly,” Armstrong said Tuesday, but he added that it will “grow faster than the economy.”
In August 2018, Apple became the first publicly-traded U.S. company to hit a $1-trillion valuation and its market cap has tripled in less than four years.
“Apple is an incredibly positive company in terms of cash flow generation, earnings, market share, profit margins. It’s almost ideal when you look at all of those metrics,” Armstrong said.
Microsoft (NASDAQ:MSFT) is valued at $2.5 trillion, while Amazon (NASDAQ:AMZN) and Google-parent Alphabet (NASDAQ:GOOGL) are valued at $1.75 billion. Some analysts have questioned whether Apple is overvalued but Armstrong said the iPhone maker’s market cap isn’t as “lofty” as some other companies.
“It’s an incredible company trading at a premium multiple,” he said. “I don’t think there’s anything outlandish about that. I think great companies should trade at premium multiples. I don’t think you’re in the extreme lofty multiples that some of the other companies are.”
AAPL shares docked seven cents early Tuesday to $181.94.