Today: Apple sets a record share price as analysts continue to cheer the Cupertino company ahead of an expected iPhone 6 debut.
The Lead: Record highs for Apple as iPhone 6 nears
The world's most valuable company established a record high stock price Tuesday, as Apple neared a $600 billion valuation ahead of the expected introduction of a new iPhone.
The Cupertino company closed with a 1.4 percent increase at $100.58, topping the previous highest closing price for Apple of $100.30 -- after adjusting for a recent 7-for-1 stock split -- set in September 2012, when Apple introduced the iPhone 5. Shares came up just short of Apple's split-adjusted intraday record of $100.72, moving as high as $100.68 during the day's trading session.
After the iPhone 5 pushed Apple to its previous record prices, the stock plummeted as much as 40 percent as investors doubted Apple's ability to push into new product categories under the leadership of CEO Tim Cook, who took over for Steve Jobs just ahead of the Apple co-founder's death in 2011. Cook, however, has guaranteed that Apple would enter new product categories in 2014, and analysts of late have been offering cooing reports about Apple's prospects for growth.
The latest such sentiment arrived in the form of a weighty research report from Morgan Stanley analyst Katy Huberty, who wrote Tuesday that Apple stock would rise to $120 within the year as investors received a fuller picture of the company's growth possibilities.
"Apple shares do not price in upcoming hardware, software, and services innovation, in our view," Huberty wrote, explaining that her expectations of a larger-screen iPhone 6 would grow Apple's sales of its most profitable product.
Huberty's rosy view of the possibilities of a larger iPhone has been voiced by many analysts -- just a day earlier, RBC Capital Markets analyst Amit Daryanani predicted that Apple could sell 70 million to 80 million new iPhones by the end of the year, a much better performance than previous iPhone launches.
"We think this iPhone cycle will be more material than prior ones largely because an increased screen size should drive a material upgrade cycle and position Apple to pick up share vs. the Android ecosystem," Daryanani wrote.
Huberty also predicted Tuesday that Apple would release an iWatch in 2014, reporting that Apple would be able to sell as many as 60 million of the long-rumored wearable devices in the first year, while charging $300 a pop.
"We see iWatch as an important barometer of the company's innovation capabilities under the leadership of Tim Cook," Huberty wrote, adding that the additions of top management talent in fashion and consumer-product design would help Apple take advantage of its potential.
Huberty also pointed out several other reasons to believe Apple stock will rise higher, including CEO Cook's massive stock-repurchase plan, which seeks to buy $90 billion in Apple shares, as well as additional spending on research and development as well as acquisitions.
Morgan Stanley seems to be putting its money where its analyst's mouth is, adding 2 million shares to its Apple position in the second quarter, according to documents filed with the SEC on Friday.
Apple is preparing to debut the newest iteration of its popular smartphone on Sept. 9, according to multiple reports. Apple's stock has now increased more than 25 percent so far in 2014, but its market cap of $597.3 billion at the end of Tuesday trading is still lower than record levels reached in 2012 due to the smaller number of shares available to the public.
SV150 market report: Google celebrates 10 years as public company
Apple's rise helped boost Wall Street to gains Tuesday, with Silicon Valley tech stocks jumping faster as Google celebrated the 10th anniversary of its initial public offering.
Ten years after its IPO, search giant Google increased 0.7 percent to $597.11, giving it total gains as a public company of more than 1,300 percent. While impressive, the Wall Street Journal pointed out that nine companies had produced better annual returns for investors over that time, and four of them are Silicon Valley tech firms: Apple, Netflix, Intutive Surgical and Salesforce. Google continues to transform itself despite its success, and the Mountain View company is reportedly preparing to make two more big changes to its services, with a YouTube streaming-music subscription offering called YouTube Music Key and accounts for children younger than 13 years old.
Redwood City data-center security company Imperva had the second largest percentage leap in the SV150 on Tuesday, improving 8.3 percent to $29.80 after replacing its CEO with an executive well-versed in selling software companies. Facebook gained 0.9 percent to $75.29 as more parents avoid posting their children's info on the site, and Twitter dropped 0.1 percent to $45.09 while codifying its attempt to place tweets from unfollowed accounts into users' streams. Netflix increased 0.5 percent to $468.15 as CEO Reed Hastings decried the interconnection fees his Los Gatos company pays Internet service providers, even as GigaOm discovered that Netflix had entered into a deal with yet another ISP, Time Warner. eBay improved by 1.2 percent to $53.75 while unleashing one-touch PayPal payments for mobile use, and Hewlett-Packard added 0.4 percent to $35.48 a day ahead of its earnings report.
Up: GoPro, Oracle, Juniper, Yelp, AMD, SunPower, Adobe, Apple, eBay, Yahoo, Intuit, SanDisk, Salesforce
Down: SolarCity, Tesla, LinkedIn, NetApp, Symantec, Pandora, VMware, Intel, Twitter
The SV150 index of Silicon Valley's largest tech companies: Up 13.3, or 0.84 percent, to 1,600.67
The tech-heavy Nasdaq composite index: Up 19.2, or 0.43 percent, to 4,527.51
The blue chip Dow Jones industrial average: Up 80.85, or 0.48 percent, to 16,919.59
And the widely watched Standard & Poor's 500 index: Up 9.86, or 0.5 percent, to 1,981.6