Apple Inc. (AAPL), Netflix, Inc. (NFLX): How Should You Trade the Most Controversial Stock in the Market

If we grant Apple Inc. (NASDAQ:AAPL) with the same metrics, then it would launch its market capitalization between $620 billion (sales) to $675 billion (income). Therefore, if we use the mean of these two valuations, then it is logical to assume a $650 billion market capitalization, or a price close to $700, is possible.

Final Thoughts (Completing The Netflix Comparison)

Right now, it might sound crazy to consider Apple Inc. (NASDAQ:AAPL) a $700 stock – but investors should remember that when Netflix was $60 there weren’t too many people with a $200 price target. In a sense, Apple has become the new Netflix, Inc. (NASDAQ:NFLX) and even trades like it.

After Netflix, Inc. (NASDAQ:NFLX)’s massive fallout, it bounced higher to $125. The stock then fell back to $60 where it traded for three months before beginning its trend higher. With Apple, it fell to a low of $385, bounced higher to $465, and now we are seeing it trade at $400. With that said, might we see a period of flat trading before a larger move higher? Personally, I think we could see the same trend, and I think it is extremely sensible to conclude that Apple Inc. (NASDAQ:AAPL) will soon trade higher until reaching a level that is closely matched with Microsoft.

In my opinion, one of the market’s greatest faults is that it lives in the moment, not learning from trends or events of the past. In my book, I consider this point, and explain how value investors can benefit from this irrational behavior. To me, Apple is a clear example of irrational behavior at its best. Based on the information in this article, I think it is one of the best and safest value investments in the market.

The article How Should You Trade the Most Controversial Stock in the Market originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols owns shares of Apple. The Motley Fool recommends Apple and Netflix. The Motley Fool owns shares of Apple, Microsoft, and Netflix. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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