There are many reasons to add Apple (NASDAQ:AAPL) shares to your growth portfolio. With AAPL stock still down 6% in 2022 and a record slate of new product launches expected in 2022, the timing is great. However, there is potential for huge gains down the road. The kind of growth that only a killer new product can deliver. The kind of growth that AAPL investors have enjoyed since the iPhone launched in 2007.
I’m talking about an Apple car. We’ve seen the revenue that Apple generates from $1,000 iPhones. Imagine if an Apple car — self-driving, or electric or both — became the must-have wheels the way the iPhone became the must-have smartphone.
It sounds unlikely for a consumer electronics company to muscle its way into the auto industry, but the timing is right. The move to electric vehicles (EVs) is shaking up the industry. Computer chips are as critical to new cars as engines. Established automakers are worth a fraction of the EV market leader — a company that didn’t exist 20 years ago.
The Future of AAPL Stock and Project Titan
Apple has a secret project under development called “Project Titan.” Except it’s not really very secret. Project Titan is an Apple car project of some sort. It may be a self-driving car, it may be an EV, or it may be both.
News of Project Titan first surfaced in 2014, when Apple began hiring auto engineers. Since that time, there have been many developments. Retired Apple SVPs have been brought in to run Project Titan, engineers from EV makers have been poached, there have been shakeups and even layoffs within the division and autonomous cars registered to Apple have been spotted prowling California streets.
In December 2020, it was reported that Apple was working on “breakthrough” new EV battery technology, had been in talks with potential manufacturing partners and was looking to start production of a consumer EV in 2024. AAPL stock popped on that news.
Last April, Apple CEO Tim Cook was interviewed by the New York Times. When pressed about Apple’s automotive ambitions, he had this to say:
“In terms of the work that we’re doing there, obviously, I’m going to be a little coy on that. The autonomy itself is a core technology, in my view. If you sort of step back, the car, in a lot of ways, is a robot. An autonomous car is a robot. And so there’s lots of things you can do with autonomy. And we’ll see what Apple does.”
Clearly, the company is very interested in the automotive space.
A Huge Market
The reason for Apple’s interest is understandable. After the iPhone, the company needs a new massive hit to keep AAPL stock in growth mode. The automotive market fits the bill.
The global EV market was worth $246.7 billion in 2020. It’s projected to be worth in excess of $1.3 trillion by 2028. That is a very big prize.
What makes it even more attractive to a company like Apple is that cars are going through a revolutionary phase. Current vehicles now have as many as 3,000 computer chips in them. Electrification and autonomous capabilities are ramping up. And consumers have proven they are willing to spend a lot of money on an EV from a non-traditional auto maker. The time is ripe for a company like Apple to shake things up even further.
Nothing Is Guaranteed
As promising as the future may seem for an Apple Car, it’s not a good idea to buy AAPL stock based on the assumption it’s going to happen. There are no guarantees here. Apple has been working on Project Titan since at least 2014. During that time, the Apple car project has gone through multiple leadership changes and has been rumored to have been cancelled several times.
Just because the company has been working on the project for a lengthy period doesn’t mean it won’t walk away from it. If Apple concludes, Project Titan could flop, it may never see the light of day. Remember the Apple-branded TV that seemed like a sure thing for years? Apple was known to have been testing prototypes. Company founder (and then-CEO) Steve Jobs famously claimed to have “cracked” the TV challenge shortly before his death. It was never released.
I’m not saying that an Apple Car — in whatever form it takes — won’t happen. I’m just saying to be cautious about investing in the company based solely on that factor.
Bottom Line on AAPL Stock
Will Apple someday have an Apple car for sale? All signs point toward the company going in that direction. If so, the potential is there for an all-new product that puts the company’s iPhone revenue to shame. An Apple car would be the kind of ground-breaking release that seriously moves the needle for AAPL stock and gives it fuel for decades more of big growth.
As I pointed out, though, there’s nothing to say that Apple’s obvious interest and investment in self-driving and/or electric cars is going to pay off.
The good news for investors is that this Portfolio Grader “B” rated stock is a pretty sure thing to continue delivering long-term growth, even if Apple walks away from its automotive ambitions. From iPhones, to services like Apple Music, to other future releases like an AR headset, AAPL stock continues to have growth written all over it.
Originally published on InvestorPlace.com
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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