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- RBC analysts have raised their price target for Apple to $ 171, which implies a 25% rise from Friday’s close.
- The technology giant can unlock a multi-billion dollar business by opening its Wallet app for crypto transactions, RBC said.
- Apple can attract users to the service by buying $ 1 billion in bitcoin, the team added.
- Watch Apple trade live here.
Apple’s shares could jump higher than current levels if the tech giant takes its first step into the cryptocurrency market, RBC Capital Markets said on Monday.
Analyst Mitch Steves raised the RBC target price for the iPhone maker from $ 154 to $ 154 in a note to customers, which implies a 25% increase from Apple’s closing level on Friday . The target is now the highest among Wall Street analysts. Steves also maintains a “superior performance” rating for stocks.
While most headlines surrounding Apple’s future offerings have recently focused on a potential electric car, RBC sees more short-term opportunities in the company’s modest Wallet app. Apple has expanded the app over the years, most recently making its first foray into financial services with the Apple Card in 2019.
Wallet already contributes to Apple’s increasingly robust services business, but an expansion in the crypto industry could make it an even bigger benefit, RBC said. Opening the Wallet app for buying and selling cryptocurrencies could immediately cement Apple as an industry leader and increase its service revenue, according to the team.
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“If the company decides to enter the crypto exchange business, we think the company could immediately gain market share and disrupt the industry,” said RBC, adding that this could help the United States become a leader in crypto in the next 10 to 20 years. years.
Apple traded about 0.6% less as of 2:45 pm ET on Monday. The stock opened sharply lower before briefly becoming positive and reducing gains later in the day.
Getting into encryption is already a proven money earner. Square makes $ 1.6 billion a quarter through bitcoin trading revenue from its nearly 30 million active users. Apple has an installed base of about 1.5 billion people, signaling that the company can earn up to $ 40 billion a year from a wallet-based crypto exchange, according to RBC.
Development costs for the multi-billion dollar revenue stream would be minimal, the team added. Square’s entire R&D budget is less than $ 1 billion.
Apple could boost its entry into the crypto industry by buying itself $ 1 billion in bitcoin, analysts added. The move would attract more users to the Wallet-based exchange and likely increase bitcoin prices, they added.
This purchase is not new. Tesla announced on Monday that it bought $ 1.5 billion in bitcoin, saying the token offered “more flexibility to further diversify and maximize returns on our cash.” The popular cryptocurrency jumped to more than $ 44,000 for the first time on Monday with news of the Tesla purchase.
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