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Apple stock: History suggests another 40% rally is coming, trader says

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Trading Nation: Citi upgrades Apple, here's why some traders don't agree

As Apple nears another record, Citi is betting on even more gains ahead.

The firm raised its price target on Tuesday to $400, citing the 5G upgrade cycle and wearables growth as catalysts. The prediction surpassed the less-than-a-week-old price target high set by Bank of America, making Citi the street's biggest Apple bull.

Todd Gordon, managing director at Ascent Wealth Partners, sees Apple headed even higher than Citi's target.

"If you look at the three advances since 2013, each has been at least 130% followed by a one-third giveback. The current advance is only 66%, so we can easily — if history is to repeat — see another 70% in years to come, putting us at $490 potentially," Gordon said on CNBC's "Trading Nation" on Tuesday.

An increase to $490 implies nearly 40% upside and would mark a new high well above its current record of just below $355.

Gordon agrees with Citi that there are multiple catalysts ahead for Apple.

"The 5G launch will be a kickoff to a possible supercycle that everyone's looking for. It's expected to launch in September' he said. "The wearables like AirPod and Apple Watch continue to grow. But we like the services with subscription, streaming, TV, gaming, the credit card. We think those will be the drivers of growth going forward." 

Apple's services segment makes up nearly 18% of total revenue. IPhones are still its biggest revenue generator at 55% of sales.

Steve Chiavarone, portfolio manager at Federated Hermes, also sees the upgrade cycle benefiting Apple. He highlights two other factors that should drive stocks like Apple higher.

"Growth has been the new defensive. Strong cash flows have met strong balance sheets which means you haven't been under pressure because you needed external financing, and your return on capital is safe," Chiavarone said during the same segment. Secondly, "consumers have pent-up demand. They have stockpiled savings, and we expect the consumer to have a good second half."

Retail sales surged 17.7% in May, the government reported Tuesday, reversing a drop in April. Analysts had expected 8% growth.

Disclosure: Gordon and Ascent Wealth Partners hold AAPL. 

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