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(Reuters) - Skyrocketing demand for Apple Inc's iPhone and iPad helped the world's most valuable company trounce Wall Street expectations after a rare miss last quarter, and analysts raised their price targets on the stock by up to $100.
Apple shares, which closed at $420.41 on Tuesday on the Nasdaq, jumped 8 percent in premarket trading on Wednesday.
Apple sold 37.04 million iPhones -- its flagship product -- and 15.43 million iPad tablets in the holiday quarter, doubling from a year earlier.
At least 14 brokerages raised their price targets on the company's stock, with at least two expecting it to touch $650 in the next 12 months.
Citigroup, which raised its price target on the stock by $100 to $600, expects "another stellar product cycle this year with an iPad refresh in March."
The growth momentum should be driven by demand in China and low channel inventories, Citigroup analysts said.
J.P. Morgan Securities, which sees iPad as a "budding growth engine" for Apple, said the strong results suggest there is more than just one major product cycle at the company.
The new product introductions, such as the iPad 3 and iPhone 5, will only add to the growth story, analysts said.
Of the 56 analysts covering the stock, more than 90 percent have a "strong buy" or a "buy" rating, with only two analysts rating it "sell" or "strong sell". According to Thomson Reuters StarMine data, the mean price target on the stock is $516.02.
Suppliers, such as Samsung Electronics, Qualcomm, Toshiba, basked in the reflection of Apple's glowing results.
RBC Capital Markets said the results are likely to be a tailwind for several other companies, including Jabil Circuit and Amphenol.
The quarter saw Apple's warchest of cash and securities swell to almost $100 billion -- more than enough to plug December's U.S. budget deficit and level with California's 2012/13 spending plan.
Analysts expect that Apple might use a portion its cash balance to pay back investors in the form of a dividend.
Apple is one of the few remaining cash-rich technology companies to resist dividend payments.
Chief Financial Officer Peter Oppenheimer said on Tuesday Apple was "actively discussing" the cash balance but didn't have anything to announce.
"We do believe the company should examine a meaningful dividend closely and are intrigued by the possibilities around any sizeable acquisitions that could improve its wireless and online services," Barclays Capital wrote in a note to clients.
Barclays, which named Apple as its top pick in the IT hardware sector, also expects to hear more about the company's entry into the TV business this year.
Reporting by Fareha Khan and Supantha Mukherjee in Bangalore; Editing by Maju Samuel, Saumyadeb Chakrabarty