Wall Street firm says Apple could surge another 18% — and even be the first company to hit $2 trillion market value next year (AAPL)

Apple is poised to surge and may even hit a major market capitalization milestone in the next year, according to Wedbush.

On Wednesday, the firm upgraded its Apple price target to $425 from $375, citing a demand snapback and the 5G cycle. That implies an 18% jump from where shares of the technology company closed Wednesday’s session.

“We believe during 2021 Apple has strong potential to be the first $2 trillion valuation given the 5G tailwinds and services momentum potential over the coming years,” said Wedbush analyst Daniel Ives in a Wednesday note. Apple’s market cap is currently about $1.5 trillion

Wedbush maintained its outperform rating on Apple, and raised its bull case to $500 per share. Shares of Apple dipped slightly in early trading Thursday.

There are signs of a “continued demand snapback” in China, which is setting the stage for a “massive pent up iPhone 12 cycle heading into the Fall in this key region as well as globally,” according to the note.

This is important as China is a key region for Apple, and according to Wedbush estimates, will represent roughly 20% of iPhone upgrades in the coming year.

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In addition, “the supply chain getting back to normalization ahead of expectations has been impressive and now ultimately puts Cook & Co. back in the drivers seat to launch this 5G cycle in its typical mid-late September timeframe,” said Ives.

The firm estimates that roughly 350 million of Apple’s 950 million iPhones worldwide are in an upgrade window which remains the linchpin to its “longer-term bullish thesis and 5G super cycle for Cupertino over the next 12 to 18 months,” according to the note.

Apple has gained roughly 23% this year.