Mark Cuban, the billionaire owner of NBA team Dallas Mavericks, has revealed that his biggest stock investment is in online retail giant Amazon.
I have close to a billion dollars in Amazon stock. It’s my biggest holding.
Mark Cuban not interested in entire FAANG, just Amazon and Netflix
Besides Amazon, the other FAANG stock that Cuban has substantially invested in is Netflix, which he started eyeing in 2014. Coming nearly one and a half years since Cuban revealed that he wouldn’t be investing in Apple over an apparent lack of opportunity, it is interesting that AAPL has since made bigger gains than his beloved Amazon.
At the time, Cuban argued that he was “content to have two big positions [Amazon and Netflix] that continue to do well,” as CNBC reported May 14, 2018.
Since then, Apple’s percentage gains have more than doubled compared to Amazon’s. On May 14, 2018, the Amazon stock reached a high of $1,611; on Monday, it closed at $1,735. That’s a gain of about 7.7%.
On the other hand, Apple’s high on May 14 last year was $189. It closed at $224 on Monday for a gain of roughly 18.5%.
So how much has Cuban missed out on by sticking with Amazon?
While it is not clear what quantity of Amazon stock Cuban currently holds, rounding it off to $1 billion worth of stake would mean that the number of shares is about 576,400.
Last year when Cuban indicated he was stocking to Amazon and staying away from Apple, this stake would have been worth around $928,580,400. If he had sold the entire holding and acquired Apple at the time, assuming he incurred no fees, this would have translated to 4,913,124 shares of the iPhone maker.
At the current price, this would be worth approximately $1,100,539,733 on paper. Cuban has therefore missed out on a gain of over $100 million by holding on to Amazon and staying away from Apple.
More headroom for Apple
This comes at a time when there are indications that Apple still has more room for growth with some Wall Street firms predicting that the recently released iPhones will sell better than expected. J.P. Morgan analyst Samik Chatterjee has consequently increased the price target of Apple from $243 to $265.
Additionally, the analyst expects demand for the iPhone to rise even further during the 2020-21 product cycle. This will be driven largely by the release of 5G-enabled devices:
In addition to a raise in volume expectations for 2019 product cycle, we are also increasing calendar 2020/2021 volume expectations led by stronger adoption of 5G enabled iPhones expected to be launched in September 2020.
Per Chatterjee, higher sales volumes of the iPhone will lead to “stronger underlying revenue forecasts” and this will subsequently “drive high investor confidence.” Therefore, iPhone will still be a significant growth driver for Apple despite an over-saturated smartphone market.