With iPad hype peaking, it's no surprise that Apple's (NASDAQ: AAPL) share price has also been at an all-high.

They're currently worth just under $240, and only two US-traded companies are worth more than Apple in terms of market capitalisation.

Valued at $215 billion, Apple recently overtook Wal-Mart ($211 billion) to the third spot, with Microsoft ($255 billion) and Exxon Mobile ($319 billion) ahead.

For the record, Google is valued at $181 billion.

Of course, Apple is a very successful company. In its 2009 financial year, it had sales of $36.5 billion, income of $5.7 billion, and sold 20.8 million iPhones and 54.2 million iPods.

Pop the Apple?

But the question remains, like any financial bubble, does the stock market overvalue Apple?

After all, shares are supposed to be priced on a combination of a company's current and future prospects - and they go up as well as down.

Considering everything Apple has touched over the past couple of years has turned golden, how long can this continue for?

Or in other words, can a combination of new iPhones, iPod touches and iPad sales take the company to another, another level?

Of course, if Apple sells enough, there's no problem. At an entry-level price of $499, there's plenty of longterm profit to be made with iPad.

For example, if Apple sold 5 million iPads in 2010, it would increase its annual revenue growth by over 5 percent, although increase its income by less due to initial set up costs.

Up and up

That's why many analysts think the best is yet to come.

MO Capital's Keith Bachman recently raised his forecast for 2011 iPad sales from 5 million to 7.2 million; in turn increasing his target price for Apple shares to $265.

This would give it a market cap of $239 billion; it would need to get past $282 per share to beat Microsoft's current valuation.

More generally, almost all professional analysts are positive about Apple's future. Out of 38 who give advice on the company, 20 reckon you should buy shares, 13 think its shares will outperform, four say you should hold onto Apple shares if you have them, while one only person thinks you should take your profits and sell.

Don't bite the Apple

Unsurprisingly, that individual is forthright on the subject.

Per Lindberg, works for MF Global in London, and as well as Apple, he thinks the entire communications equipment sector is over valued.

"There is no doubt, in my mind, that the whole sector is hugely overstretched," he told The Globe and Mail. "The whole sector is priced as if the average player would sustain 25 percent margin in eternity."

It's the valuation of Apple that he thinks is really crazy though.

Estimating that iPhone accounts for roughly half of Apple's market capitalisation, this works out at more than twice the annual revenue of the entire smartphone market; around $80 billion, or around half of the total value of the smartphone industry (circa $200 billion).

Yet Nokia and Research In Motion (BlackBerry) are bigger than Apple in terms of global smartphone install base, while even in North America, BlackBerry beats out iPhone as the largest smartphone platform.

Apple shipped 20.8 million iPhones in FY2009 compared to 36.7 million BlackBerries shipped during RIM's FY2010.

Incidentally, with annual revenues of $15 billion and income of $2.5 billion, RIM is valued at $40 billion; meaning Apple operates at a premium of between 2 to 2.5 times.

Golden Apple

Still, Brian Marshall, at Broadpoint Gleacher Securities Group, doesn't have a problem with that. He reckons Apple could have sales of $100 billion within three to five years.

"I think Apple is the best technology company on the planet," he told The Globe and Mail. "I'm willing to put a 50 percent premium to the S&P 500 on it."

In that context then, a lot is riding on iPad. The first press release about the US and the wider global roll out will no doubt be good - if vanilla - news.

Instead, the race to sell five million units will be the real touchstone of success or failure. If Apple can finish its financial year at the end of December 2010 having beaten that target, even Per Lindberg might have to change his tune.

But if it's less than two million, expect Wal-Mart to be the third highest valued US company again.

Jon Jordan owns no shares mentioned, although he does have a BlackBerry Curve 8900, a iPod touch, an Android G1, a Motorola Droid and an iPad on order. He currently likes the Droid the best.