In 2018, Apple became the first publicly-traded company to hit the $1 trillion market capitalization milestone. Some analysts are now turning their attention to the next $2 trillion milestone, including Evercore ISI analyst Amit Daryanani. In a new investor note today, Daryanani breaks down what Apple needs to do to cross the $2 trillion threshold.

As first reported by Barron’s, Daryanani’s analyst note essentially focuses on Apple’s continued growth in its existing business, not that “the company suddenly jumps into some vast new market.”

One of the keys, according to Daryanani, is that Apple’s Services and Wearables businesses will continue to grow. In the Wearables business, the analyst expects growth to $60 billion thanks to the expansion of AirPods and Apple Watch. The Services business could grow to $100 billion, Daryanani says

The Services business specifically marks an important focus or Apple because of its higher margins compared to other segments, and the Services sector is growing faster than the rest of Apple’s business:

The analyst noted that Apple’s services segment operates with gross margins in the mid-60% range, versus a percentage in the high 30s for the corporation as a whole. Services continue to grow faster than the hardware operation, so corporate gross margin will expand, Daryanani predicted.

Daryanani also emphasizes that Apple will continue to buy back its own shares:

The analyst also expects Apple to continue aggressively buying back stock. He thinks the company will reduce its share count by about 1 billion shares in the forecast period, from 4.6 billion at the end of fiscal 2019 to 3.6 billion in fiscal 2024. At that share count, the market cap would hit $2 trillion if the stock price was just over $550.

Ultimately, Daryanani writes that he believes Apple’s stock can hit the $2 trillion market capitalization milestone within the next four years. Read more in the full report at Barron’s.

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