AAPL Stock: If Apple Inc. Does This, Shares Could Skyrocket

Apple Inc. (NASDAQ:AAPL) stock has managed to hold at the $92.00 level, but the near-term upside of this $500-billion company is limited unless CEO Tim Cook can steer the maker of the hugely popular “iPhone” franchise in the right direction.

The problem is that Apple essentially derives about three-quarters of its revenue from the iPhone. This lack of revenue diversification can kill a company if not rectified.

A perfect example of focusing too much on one product was Microsoft Corporation(NASDAQ:MSFT), which, for decades, relied heavily on its “Windows” operating system and business software.

A dying PC market and move to mobile droveMSFT stock to reinvent itself as an innovator of sorts with its focus shifting to cloud applications, mobile, and gaming. The strategy shift saved Microsoft and the stock market is rewarding the stock.

Apple must also take a page from Microsoft’s playbook and continue to expand its impressive technology ecosystem away from simply relying on the iPhone.

Chart courtesy of www.StockCharts.com

What Apple Needs to Do

What makes AAPL stock worth a look is the massive more than $200 billion of free cash on its balance sheet.

A big war chest means Apple has time to pursue aggressive acquisitions and focus on the next big thing such as its “CarPlay” application to control a vehicle’s entertainment system.

Of course, speculation is AAPL is moving towards an Apple Car and autonomous vehicle technologies. This is the kind of innovative thinking Tim Cook must pursue in order to get investors and Wall Street excited about the stock again.

Much of the excitement towards AAPL stock arose when the company launched the “Apple Watch” to much fanfare. I didn’t get it, but there was so much hype over the watch, as it integrates into the company’s ecosystem of products.

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