Apple just hit another record high ahead of the launch of a VR headset Wall Street says could 'dominate' the market
- Apple stock hit a record high on Monday as investors await the rumored announcement of a mixed reality headset.
- The near-$3 trillion tech giant is expected to unveil the AR/VR device at this week's developers conference.
- Bank of America said Apple could "dominate" the AR/VR market with its rumored device.
Apple stock jumped nearly 2% to hit an all-time on Monday as investors await the announcement of a rumored mixed reality headset.
Shares hit a high of $184.36 on Monday, eclipsing the prior high of $182.94 reached on January 4, 2022. Apple stock is up 42% year-to-date, and is up 48% from its 52-week low reached at the start of this year.
The tech giant, which currently has a valuation of $2.89 trillion, is expected to unveil the long-rumored device at its Worldwide Developers Conference this week. The device would put Apple in direct competition with Meta Platform's lineup of Quest AR/VR headsets.
While the AR/VR headset market has yet to catch fire with consumers, that could change over time with the arrival of a headset from Apple, according to a Monday note from Bank of America, especially if the device costs less than the rumored $3,000 price tag and has a few killer apps at launch.
"Consensus opinion is the headset would cost $3,000. Apple could surprise positively with a lower price. With a historical focus on design, creativity, collaboration, and fitness we view killer apps to focus on these areas or a combination of such," Bank of America's Wasmi Mohan said.
While Mohan rates Apple at "Neutral," he raised his price target to $190 from $176 on Monday, suggesting further upside of 5% from Friday's close.
"Apple best positioned to dominate mixed reality [market]," Mohan said.
And if it does, that should drive solid gains for the growth outlook of Apple's high-margin Services division, which includes App Store sales and subscriptions to services like Apple Music and Apple TV+.
"Meta's apps for the Quest headset range from free to 10's of dollars (some popular apps approaching $40). If Apple is successful in creating a rich ecosystem with the headset, we could see upside to Services growth rates," Mohan said.
Some potential killer apps that could help sales of Apple's rumored headset include a virtual fitting room for shopping, a virtual meeting room for remote work, or an AI-powered personal fitness coach, among others.
Despite the potential benefit from a successful launch of Apple's rumored AR/VR headset, Mohan said the risk-reward profile Apple is current balanced, hence his "Neutral" rating, as the potential for new product launches and solid iPhone sales is offset by the potential for weakening consumer spending in the second half of the year.
