Activist shareholder and a major Apple investor Carl Icahn said on Wednesday that Apple should be trading at $216 per share, which propels Apple's valuation at $1.3 trillion.

The current valuation puts the company in excess of $700 billion, the first time a company has reached the mark.

Carl Icahn
Billionaire activist investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014. Icahn has backed off from his campaign urging Apple to increase its stock buybacks, citing the company's recent repurchases as well as an influential proxy adviser's call against his proposal.Reuters

As per Icahn's calculation, at 20 times earnings, coupled with net cash of $22 per share, the share value stands at $216 a share.

"This is why we continue to own approximately 53 million shares worth $6.5 billion, and why we have not sold a single share," said the investor in a letter to his followers on the micro-blogging site – Twitter.

He further noted: "Also, to the extent Apple introduces a TV in FY 2016 or FY 2017, we believe this 20X multiple is conservative," Reuters reports.

Share Buyback

Icahn ranks as one of the top 10 investors in the iPhone manufacturer. He has frequently urged Apple to buy back shares, and increase dividend payout.

In October, he called on the company to use its cash hoard to buy back shares, which was then trading at $100 a share. Such a move would double the value of Apple shares.

Icahn also said that he was looking forward to the capital return programme update to be released in April, hoping that the company would increase its share buyback programme on a large scale.

Apple's chief executive Tim Cook said on Tuesday that he plans to move cash from the $178 billion hoard to investors, after paying for research and development and other collaterals.

Last April, the company said it plans on returning more than $130 billion to its shareholders by the end of the current year, said Reuters.

Apple shares closed at $124.88, up by 2.3 per cent on Wednesday.