Barclays Capital said Apple Inc.'s (NASDAQ: AAPL) capital expenditure growth could point towards revenue upside. The brokerage reiterated its overweight rating on shares of Apple with a price target of $465.

We continue to believe that our revenue estimates for Apple are conservative over the long term -- and we believe Apple thinks so as well. We make this assertion based on Apple’s capital expenditure (capex) projection, which is really the only major figure the company forecasts for investors on an annual basis in every 10Q and 10K filing, said Ben Reitzes, an analyst at Barclays Capital.

Over the past few years, Apple’s capex growth year-over-year has tracked closely with the company’s actual revenue growth for that same year.

While Reitzes' estimate for Apple’s fiscal 2011 revenue is $102.3 billion (up 57 percent year-over-year; consensus is $102.8 billion), Apple is guiding its capex to be $5.7 billion in fiscal 2011, of which at least 80 percent should be paid in cash. This cash capex growth of 131 percent year-over-year is far ahead of the street’s estimate for 58 percent revenue growth this year and 19 percent growth for fiscal 2012.

Note that Apple has held cash capex to about 3 percent of revenue from 2006-2010. A portion of Apple’s capex for fiscal 2011 is arguably not directly correlated to revenue growth as the company paid as much as $400 million in the fall for the remainder of HP’s Cupertino campus.

However, Reitzes believes most of the capex is tied to expectations for future growth given a portion of the capex spending is for retail store development, which drives increased sales -- especially internationally.

Apple plans to open 40 new stores this fiscal year with 2/3 of them international (Apple currently only has stores in 11 countries). Reitzes believes Apple is being selective with new stores outside the U.S. -- and each store has an outsized impact on sales. Currently Apple average sales per store equate to over $40 million per year.

We also believe that the growth in Apple’s capex in fiscal 2011 is being driven by the company’s investments in its North Carolina data center. With this data center, we believe Apple will be able to release its own cloud-based content service quite soon, said Reitzes.

Reitzes looks for Apple to use its cloud based iTunes/MobileMe service to further lock in customers to its ecosystem by making content available seamlessly on all of its devices -- including iPhones, iPads and Macs.

Reitzes noted that near field communication (NFC) capability on future products could also dovetail nicely with cloud based services by providing the availability to recognize users and potentially allow them to log in virtually directly into Macs and other devices remotely.

Reitzes believes that Apple could charge a recurring fee for this service and will likely offer much more available memory than Amazon does since its users have much larger libraries.

Theoretically, a cloud-based content service could allow Apple to offer cheaper versions of its devices with less on board memory -- which would help the company get more gadgets into the hands of consumers. Reitzes believes that Apple realizes this offering could help it sell more Macs, iPhones, iPods and iPads -- and the acceleration of its capex growth could be an indication of its potential.

Reitzes also noted that last Wednesday, Apple reported fiscal second quarter EPS of $6.40, significantly beating his estimate of $5.10 and the recently raised consensus estimate of $5.37. Earnings upside was primarily driven by better-than-expected revenue and margins.

Apple's second quarter revenue of $24.7 billion (up 83 percent year-over-year) beat Reitzes' estimate by about $2 billion and the raised consensus by $1.4 billion due primarily to better-than-expected iPhone and notebook sales in the quarter.

With regard to Japan, Apple indicated it did see some revenue impact in second quarter but it was not material to consolidated results. The company does expect to see a rather small $200 million hit to revenue from Japan in its fiscal third quarter; and is unsure of any revenue impact beyond.

With continued upward momentum in core product areas such as Macs (still just around 5 percent worldwide share), iPhones (new products and more carriers to come), and iPads (supply constrained and early in the product cycle), along with support from more new product areas likely to come and rapid international expansion, we believe our revenue growth estimates for Apple are conservative for years to come, said Reitzes.

Reitzes said his checks indicate that iPad lead times have fallen to 1-2 weeks from 2-3 weeks previously. Reitzes believes the shorter lead times for iPad 2s point toward much higher sales quarter-over-quarter for June.

Reitzes continues to believe that Apple's valuation is attractive as shares can benefit from iPad and iPhone demand, Mac share gains, international expansion and a pipeline of innovations. Shares have rebounded a bit through solid earnings, but he believes valuation still remains attractive.

Apple stock closed Tuesday's regular trading down 0.73 percent at $350.42 on the NASDAQ Stock Market.

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