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Comment by cincinnatus | Hacker News Reader

And in a rational world it would be. It's P/E ratio is crazy low compared to Google and Amazon just in raw terms. But the market is an irrational place, it only looks sane in aggregate and over longer time periods.

The rational part of me says it will be over 1k within a year, regardless of how irrational I know that thought to be :-)

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Apple's P/E isn't comparable to Amazon's. The two companies execute radically different strategies. Amazon relentlessly spends profits to capture market share; Apple is famous for being the profit share leader in the markets it sells in.

If Apple wanted to boost stock price they would have a 20:1 stock split. Price per share would then be in the $20's and would quickly shoot up because of how "cheap" the stock is.

P/E is just one signal of many that affects the stock price. You cannot look at it in isolation.

For example, the smartphone and tablet market is subject to changing trends and quick turmoil. One botched launch cycle from Apple and/or one great launch from one or more of Samsung, Google, Nokia is enough to change things in just one year. That implies risk, and the market does not like risk.

Contrast that with well entrenched near monopolies with well erected moats like Google in the web search market, Amazon in the online retail market and Microsoft in desktop software with Windows/Office.

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