Late Tuesday, Apple reported earnings of $13.87 a share, double analyst expectations, thanks to booming sales of iPads and iPhones.
Its market capof $417 billion "is deserved," he said. "This is a company that’s going to generate over $40 billion in earnings this year, so its earnings multiple is about 10 times earnings, which is very reasonable."
And that's only the start. He sees continued growth from the Asia-Pacific region, which was down in the last quarter because of the delayed introduction of the iPhone 4s in China. Even if phones are sold there at much lower price points, “we're still talking about a very significant market” for smartphones, Sacconaghi said.
Should Apple use some of that cash to buy a supplier? Glen Yeung, a semiconductor analyst at Citigroup, said in a separate interview that it wouldn't make sense of Apple to buy Broadcom, for instance, since Apple buys only 10 percent of the company's chips. Buy Broadcom and the company will lose 90 percent of its business because customers aren't going to want to buy chips from Apple, Yeung said.
"So financially it won't make a lot of sense," he said.