The race among stock analysts to set ever-higher price targets on shares of Apple, Inc. broke the $1,000 a share barrier for the first time today.
Brian White of Topeka Capital Markets in Chicago began coverage of the iPad and iPod maker with a $1,001 price target. "Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend," White wrote in a research report.
The shares today traded at $614 and are up more than 50 percent this year. Apple's market value of $574 billion makes it the world's most valuable company. At $1,000 a share, it would be worth a breathtaking $1 trillion.
If all this seems like too much too fast, it's worth remembering that during the dotcom bubble of the late 1990s a number of tech companies approached the $500 billion market cap mark and they all came crashing back to earth.
But to many investors, Apple is the real thing and not overpriced. Its current price-to-earnings ratio - a rough measure of how much a dollar's worth of the stock generates in profit - is 17.5. That's actually below the average P/E for all stocks traded on the Nasdaq at 21.1.
On the other hand, White may be running too far ahead of the pack. The average "price target" of 46 analysts who follow the company is $700. In Wall Street terms, price targets are simply the analysts' guesses on where they think the stock will go.
Tech analyst Rob Enderle says Apple may see a few bumps in the road without its visionary founder Steve Jobs now that Tim Cook, the former operations chief, is in the CEO seat.
"Now recall that Apple was in decline until Steve Jobs took over - and for a while after - and the new Apple was modeled after Sony, which currently is a bit of a train wreck. It's undisputed that Steve Jobs was CEO of the century, which means he was the best there was in his time. It's known that he was a micromanager. I would argue the majority of those who followed Apple thought Steve was irreplaceable there," Enderle writes.