At nearly $270, Apple stock still showing no fear of heights

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Can anything stop the Apple Inc. stock juggernaut?

The tech giant’s shares soared again on Thursday, the second straight big gain after the company’s blowout quarterly earnings report on Tuesday and CEO Steve Jobs’ promise of ‘extraordinary’ new products.

Apple jumped $7.25, or 2.8%, to a record $266.47 after surging $14.63, or 6%, on Wednesday.The shares now are up 26% year to date and 270% since the end of 2005.

Apple’s latest quarterly earnings of $3.1 billion were nearly double what it earned a year earlier, thanks to strong sales of iPhones and Macintosh computers. And the results didn’t include the wildly popular new iPad, which just went on sale April 3.

Often when a stock goes vertical some of the credit goes to “short sellers” who had previously borrowed the shares and sold them, betting that the price would drop. The shorts expect to eventually replace the stock they sold with shares purchased for less and pocket the difference between the sale price and the purchase price.

If the stock instead continues to rise, however, the shorts may rush in to buy and close out their trade before their losses worsen. That can add more fuel to any rally.

Apple does have the short sellers on the run -- but there were few of them left, anyway. The number of shorted shares stood at just 10.1 million as of March 31, down from 17.3 million at the end of February, according to Nasdaq market data.

Shorted shares now amount to just 1.1% of Apple’s shares outstanding. For Dell Inc. the comparable figure is 2.7%; for Google Inc. it is 1.4%.

With Apple’s stock now priced at about 21 times analysts’ mean 2010 earnings estimate of $12.65 a share, much of Wall Street still figures the shares are relatively cheap. So analysts have been falling over themselves the last few days to raise their target prices, usually meaning the level they expect the stock to reach in the next 12 months.

JMP Securities raised its target to $290 from $260. UBS went to $315 from $280, Citigroup to $320 from $300 and RBC Capital to $350 from $275.

All of which, understandably, may make even some of Apple’s diehard investors nervous. Is it finally too much hype? The Wall Street Journal’s Brett Arends thinks so. He writes on wsj.com on Friday ‘Seven Reasons Apple Shareholders Should be Cautious.’ Yep, you’ve heard ‘em before: ‘Apple’s good, but not that good; Jobs’ ego is dangerous; the company risks backlash as it begins to dominate industries from cell phones and games to music and media.’ Etc.

For investors hoping for a cheaper entry point, don’t surrender all hope: Although it may seem like a long time ago, Apple shares fell nearly 11% from Jan. 19 to Feb. 4 amid a broad stock market pullback.

On Feb. 4 you could have had the shares for about $192 -- which looks like a screaming bargain in retrospect.

-- Tom Petruno