Apple's stock rose 11 per cent on Monday to close at $61.35 following news that analysts at Piper Jaffray almost doubled the price target on Apple stock from $52 to $100 on evidence that the iPod is resulting in more Mac sales
Piper Jaffray analyst Gene Munster issued a note to clients saying: "We believe that the remarkable satisfaction with the iPod creates a word-of-mouth wildfire that generates new customer interest in Apple products.
"The bottom line from our survey is that 13 per cent of iPod users in our sample users were formerly PC users that, following the purchase of their iPod, have already either purchased a Mac (6 per cent) or are planning to buy a Mac within 12 months (7 per cent)."
According to Associated Press, Munster took a "conservative stance" cutting the estimate suggested by the survey in half, and predicting a 6.5 per cent increase in Mac sales to iPod users.
The news prompted enthusiasm for technology stocks and actually stalled a rally in crude oil, according to Reuters. Apple shares traded as high as $64, the highest the stock has soared since September 2000.
In response, Fulcrum Global Partners analyst Robert Cihra also boosted his price target for Apple. He has risen estimates up to $65, up from $53, according to Reuters.
Daiwa Institute of Research's Pranab Sarmah told Reuters: "This MP3 player business segment is in a high growth stage. We believe this buiness could provide upside revenue surprises over the coming quarters.
"Strong growth in digital players should help not only Apple and Creative but also their competitors such as Sony."