iPad and iPhone 4 Could Make Apple Bigger Than Microsoft

Shares in Apple (AAPL) get rave reviews these days from Wall Street analysts like Kathryn Huberty at Morgan Stanley. Her forecast increased from $275 per share to $310, with a "bull case" scenario topping out at a whopping $400 per share in 2011. Apple could earn up to $20 per share thanks to strong iPad and iPhone sales worldwide.

Apple stock closed up almost two percent today at a price of $247 and continues to gain in after hours trading. With the third largest total market capitalization of US public companies, Apple is hot on the heels of computer giant Microsoft. Second place Microsoft is behind only Exxon Mobil Corporation, the public company with the largest market cap in the US.

The gap between Microsoft and Apple now stands at less than $4 billion, with Apple's total market capitalization at $227 billion and Microsoft's at $231 billion. Only three short years ago, Apple shares were trading for $85. Shares in Apple have gained 17% since the beginning of 2010.

Huberty insists that the market is still underestimating the earnings power of Apple's devices, and that the company's future growth opportunities are being under-appreciated. According to an Alphawise survey, 58 percent of iPhone owners are planning to upgrade to a new model. This would lead to sales of over 19 million upgrade units in 2011.

The iPad is launching internationally in nine countries this week, and Apple plans to sell the device in nine additional countries starting in July. The rollout was postponed several times due to high demand and short supplies. iPhone OS 4 will come to the iPad in the fall, after the launch of the iPhone 4 hardware. Steve Jobs is expected to officially launch the iPhone 4 at the WWDC keynote speech in two weeks.