Apple Shares Hit Record Close on Optimism for Next iPhone

Apple shares hit a record on optimism the next iPhone will drive a resurgence in sales and help the company’s services businesses grow, according to Bloomberg. The stock climbed less than 1 percent to $133.29 at the close Monday in New York, the highest on record.

The increase valued Apple at about $699 billion, making it the world’s most highly capitalized company. Google parent Alphabet is next at $573 billion, according to data compiled by Bloomberg. Analysts are predicting a further gain in Apple shares in the next year, based on the average 12-month target price of $142.58.

While the iPhone 7, introduced in September, failed to convince as many existing customers to upgrade as its predecessor did, it succeeded in attracting new smartphone buyers. That bodes well for the next iPhone later this year, which is expected to be a more substantial upgrade, according to analysts.

More iPhone users increases the chances Apple can sell software, services and subscriptions like Apple Music and iCloud. Services revenue grew 18 percent to $7.2 billion in the most recent period, and the company aims to double the annual total to more than $50 billion by fiscal 2021.

Still, Apple has struggled to expand into other businesses that are big enough to move the needle at a company with more than $200 billion in annual revenue. Its secretive car project got off to a slow start and the Apple Watch, while popular, hasn’t come close to matching the iPhone’s success. The business can’t rely on hit smartphones alone in the future.