Those who regularly follow Apple stock (NASDAQ:AAPL) know that it’s got several sub-branches that help fuel its impressive results. The App Store is one of the biggest and most important sub-branches, and recently, Barclays suggested that the App Store might not be the only major source of revenue for Apple going forward. The notion was all Apple investors needed to hear, and Apple was up somewhat in Thursday afternoon’s trading.
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Several sub-branches form what’s known as the Services business, which, analysts believe, could be worth about half of Apple’s total valuation all by itself. Barclays—via analyst Tim Long and his team—believe that the App Store is a big deal, but there’s plenty of room for the rest of the Services sector to kick in as well. Long looks for Services to contribute around $83 billion this year and $93 billion in Fiscal Year 2024. That’s kind of a small growth rate, but given that it requires so little capital to keep it running, that may be around 35% of Apple’s gross profit.
In fact, Barclays looks for advertising to make up around 29% of Apple’s revenue in the Services sector. That’s a point made all the easier by Apple continually releasing new tools. In fact, Apple just released the visionOS software development kit (SDK) that will help app developers build apps for the Vision Pro headset, soon to be released. That’s a whole other set of apps that will draw buyers, users, and advertisers who want to make their products and services known to those app buyers and users.
Apple currently stands as a Strong Buy by analyst consensus, thanks to 22 Buy ratings and seven Holds. However, Apple stock only has 1.45% upside potential, as it’s close to its average price target of $189.17 per share.
