$Apple (AAPL.US)$ is not just coasting on its iconic devices and services; it's gearing up for a significant boost in its revenue trajectory.

With a $110 billion share repurchase authorization in its arsenal, Apple stands out among its big tech peers. But what's more compelling is the fresh perspective on how Apple can double its revenue growth.

The Apple Analyst: Laura Martin, a seasoned analyst at Needham, recently raised her price target for Apple stock from $220 to $260, underscoring a bullish stance on the tech giant.

The Apple Investment Thesis: Martin argues that while Apple's current single-digit revenue growth may seem stable, there's a looming risk over the next three years.

Apple's Golden Opportunity Could Lie In Ad Revenue

She sees a golden opportunity in Apple's potential to build a robust advertising business, similar to what Amazon has accomplished.

Martin points out that the global advertising market, projected to reach $966 billion in 2024 with $500 billion on mobile, dwarfs Apple's forecasted FY24 revenues of less than $400 billion. The high margins typically associated with advertising, ranging between 70% and 80%, could significantly boost Apple's profitability without necessitating price hikes on its devices.

According to Martin, even a modest entry into the advertising space could have profound effects. For instance, selling CTV ads on AppleTV+ alone could add 140 basis points to Apple's revenue growth, potentially doubling the current consensus growth rate of just 1% for FY24. Incorporating ads into the App Store could accelerate this growth even further.

Reservoir Of Untapped Potential In Apple Products Usage

The core of Martin's investment thesis revolves around Apple's massive installed base of over 1.25 billion of the wealthiest consumers globally, using more than 2.2 billion active devices as of the end of 2023. This loyal user base, which engages with Apple products for an average of five hours daily, represents a vast reservoir of untapped potential.

To maximize this potential, Martin suggests that Apple could focus on:

• Increasing the average revenue per user (ARPU) and

• Reducing churn by upselling additional devices and services.

Over the years, Apple has successfully expanded its ecosystem with add-on hardware like tablets, watches, and AirPods, as well as services such as Apple Music, AppleTV+, and Fitness+. Bundling family plans and offering trade-in discounts for older iPhones have further solidified user loyalty and lowered entry barriers.

Martin's analysis presents a compelling case for why advertising could be Apple's next big frontier. By leveraging its unparalleled user base and diving into the high-margin world of digital advertising, Apple has the potential to significantly enhance its revenue growth and maintain its competitive edge in the tech industry.

Investors should keep a close eye on Apple's strategic moves in this direction, as they could herald a new era of profitability for the company.