Cramer Thinks The iPhone 8 Cycle Will Be A Winner

Apple Inc. AAPL is trading within striking distance of its all-time highs of $156.65, which means it's less than $200 billion away from trading at a $1 trillion valuation. CNBC's Jim Cramer talked about Apple's path toward achieving this milestone during Monday's "Squawk on the Street" segment.

According to Cramer, Apple is a consumer products company led by its iPhone but accompanied with a great services revenue stream.

Razor, Meet Razor Blade

As such, Apple is a classic example of a "razor/razor blade" story and not certainly one about key buzzwords like cloud, social and mobile. He emphasized that once a company is not a cloud, social or mobile company, it loses out on valuation metrics and "becomes a cheaper stock than a Colgate-Palmolive Company CL or Procter & Gamble Co PG."

Both consumer household goods companies are in fact trading at a higher P/E multiple of 26.96 and 24.12 versus Apple's 18.0 P/E but this narrative could change as soon as the $1,000 priced iPhone 8 could help push the stock even closer to the $1 trillion valuation mark.

Cramer continued that many surveys are pointing to a strong iPhone 8 cycle, as many iPhone 5 and iPhone 6 owners are waiting to upgrade to a device that could even replace their laptop computers.

But Apple fans shouldn't get too excited just yet, as a potential IPO from Saudi Arabia's oil behemoth Saudi Aramco could be valued as much as $10 trillion.

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