Apple's budget 5G iPhone will accelerate sales and catapult the stock past a $3 trillion valuation, according to JPMorgan

• Apple's expected launch of a budget 5G iPhone SE will accelerate its sales cycle in early 2022, according to JPMorgan.
• The bank raised its price target on Apple to $210, representing potential upside of 17%.
• Apple's stock price is less than 1% away from hitting a $3 trillion market valuation on Monday.

Apple's upcoming launch of a budget 5G iPhone SE will accelerate its sales cycle and help drive its market valuation to well above $3 trillion, according to a Monday note from JPMorgan.

The bank reiterated its top pick status for Apple heading into 2022 and raised its price target to $210, representing potential upside of 17% from Friday's close. A move to $210 would catapult Apple well into $3 trillion market value territory, with the iPhone maker less than 1% away from hitting that milestone for the first time ever on Monday.

Apple's stock price needs to hit $182.85 for the $3 trillion market valuation to be reached. Shares traded at $181.72 in early Monday trades.

"We believe that there are more upgrades to consensus iPhone shipments still to come with the iPhone SE with 5G capability to launch soon in early 2022, which has the potential to drive upgrades from the installed base of old iPhones as well as switchers from an installed base of low- to mid-end Android phones," JPMorgan explained.

The bank estimates there are more than 300 million iPhone users that are overdue for an upgrade, and more than 1.4 billion low- to mid-end Android phones in use.

The expected launch of a sub-$500 iPhone with 5G capability in 2022 will boost investor expectations of Apple's 2022 product lineup, as many were expecting a weaker product cycle earlier this year, according to JPMorgan. The bank believes Apple could sell more than 30 million iPhone SE units in 2022, bringing its total 2022 unit forecast to 250 million.

Apple's original iPhone SE was launched in the spring of 2016, but infrequent model updates have led analysts to assign little weight to the potential launch of an upgraded version of the phone on a more frequent basis. Apple released an upgraded iPhone SE model in 2020, without 5G capability.

"We expect Apple to upgrade the iPhone SE with 5G connectivity in 1H22, and also make it a frequent annual upgrade going forward, driving further its already demonstrated strategy of encompassing a wider range of price points," JPMorgan said.