Wall Street has a new rule... when Carl Icahn talks, people listen. Mr. Icahn, activist shareholder and investor, is the founder and fund manager of Icahn Capital LP, in which 30.4% of their $32.1 billion portfolio is Icahn Enterprises [NASDAQ:IEP], a diversified holding company and 20.5% is in Apple shares [NASDAQ:AAPL]. According to a Securities and Exchange Commission (SEC) 13F filing, Mr. Icahn owned about 53 million Apple shares at the end of the first quarter, worth around $6.8 billion. 

In an open letter to Apple Chief Executive Officer Tim Cook published on the Shareholders' Square Table website on Monday, Mr. Icahn said Apple should be trading at $240 per-share as the company was poised to enter and dominate the television market by 2016 and the automobile market by 2020.

Here is a key passage from Icahn's letter:

“Apple is poised to enter and in our view dominate two new categories (the television next year and the automobile by 2020) with a combined addressable market of $2.2 trillion, a view investors don’t appear to factor into their valuation at all.”

Mr. Icahn may be slightly off the mark on his thesis as a report in the Wall Street Journal on Monday, May 18, suggested that there will be no Apple television set. The “people familiar with the matter” have confirmed to the Wall Street Journal that Apple did have a small team working on an Apple TV set a few years ago, but the team was disbanded more than a year ago.

There is rumor floating around that Apple is working on an automotive initiative, codenamed "Titan”. Hundreds of workers have already been assigned to the project, though some believe Apple is working to build a full-fledged electric car. According to AppleInsider, it is more likely that Titan is associated with advanced CarPlay integration, or a program to enhance Apple Maps with 3D street imagery. 

Apple just announced a blow-out fiscal 2015 second-quarter earnings report as their total revenues came in at $58 billion, up 27.2% year-over-year and net profits of $13.6 billion, or EPS of $2.33, up 40.4% year-over-year. Wall Street was expecting earnings of $2.16 per share on revenues of $56.1 billion. The company sold a total of 61.2 million iPhones during the quarter, up 40% from the same period a year ago. Analysts were expecting iPhone sales of 57.3 million units. 

The company began its promotional launch of its Apple Watch in Apple stores on April 10, and began shipments and pre-order deliveries starting April 24. There are already 3,000 plus apps for Apple Watch on the App Store. There are no sales figures for the Apple Watch yet, so there is no way to know how the Apple Watch business is doing.

In the 5-year stock chart, the AAPL chart pattern completed a cup shape in June 2014 with the base at $88.50 per-share and bottom at $52.28 per-share, giving a cup base depth of about 30%. Most cups come with a handle, or a smaller correction within the base, that serves as a last shakeout before the stock surges to new highs.

From the cup without handle model, our price projection for AAPL is $151 per-share, determined by adding the depth of the cup pattern to the point of breakout. The stock has been climbing the “Wall of Worry” in a narrow bullish channel as pundits on financial media were raising all kinds of concerns about iPhone sales, competitors such as Samsung and Xiaomi, etc. From the way Apple shares move, the stock could hit our projected price by the time of the release of the fiscal 2015 third quarter earnings report in July.

Daniel Ives of FBR Capital initiated coverage of Apple in April with an Outperform and set a $185 target price for the stock, meaning Apple could be the first publicly owned company having a price tag of over $1 trillion.
On Monday, Mr. Ives reiterated his target as he predicted that China will become Apple’s biggest market by revenues, in two years.

Cantor Fitzgerald analyst Brian White joined Apple’s trillion dollar market cap projection club as he reiterated his Buy rating and boosted his price target on Apple to $195 per-share, the highest price target on Wall Street.

The 12-month target price for AAPL on Yahoo Finance is $148.18 per-share. Apple will report its fiscal 2015 third-quarter earnings on July 20-24. Analysts are expecting earnings of $1.74 per share, up 35.9% year-on-year, on revenues of $48.29 billion, up 29% year-on-year.

Disclosure: Long Core Position AAPL in Portfolio. No positions in any of the other companies mentioned.