Here's the history of Apple's stock price (split adjusted). Astounding.
Even more astounding that Apple's market cap now exceeds the highest market cap Microsoft ever attained, and it is the reigning market cap champion of the world.
With a trailing PE of just under 16, AAPL is comfortably under the S&P 500's PE ratio of 17.9, especially considering all the cash it holds offshore (over $140 billion). Subtracting the cash, Apple's PE is a mere 13.6.
One reason the market has been relatively under-enthusiastic about Apple is that earnings had been relatively flat for the past three years—until now. First quarter earnings were almost 50% higher than in the year-ago quarter. Looking ahead, I think the market is still very skeptical that Apple can pull off further gains. How can a world record-holder in market cap and earnings keep racking up new records? That's the question investors are asking themselves. It's not easy to believe that Apple can remain on top forever. At some point they'll stumble, or a new product will blindside the company in disruptive fashion.
But for the time being, Apple still has upside potential. The Apple Watch will start shipping in April. To be sure, no one really knows whether it will be a must-have gadget or just a fashion accessory. I remember receiving my first iPad and thinking, "well, it's pretty impressive, but I'm not sure how I'll end up using this thing." It took awhile before great apps started appearing and the iPad started replacing laptops. I suspect the same thing will happen with the watch.
Apple's laptops are still the best in the world, and their sales are growing at a time when PC sales are declining. The 27" retina-display iMac has no equal at any price, and is simply the most impressive computer on the market. The iPhone is still in the early stages of penetrating the gigantic Chinese market, and Apple will be opening dozens of new stores in China in the near future. The iPhone 6 and 6+ are the best in the business, and will undoubtedly get better in their next iteration. iPhones are out-selling much cheaper Android phones in every market. (Dirty secret: the Android OS has some severe limitations: it's much more susceptible to viruses, it suffers from extreme fragmentation, and only a fraction of the phones currently in use will ever benefit from future software upgrades, whereas nearly every iPhone will.)
Finally, Apple is a leading innovator in its field and has a deeply ingrained culture of design excellence. Moreover, Apple has figured out how to manufacture and sell some 76 million phones in just three months, all over the world, in addition to everything else it does. That's pretty impressive.