Billionaire and activist investor Carl Icahn said he has acquired a large position in Apple Inc which could drive stocks to as much as $700 per share if Apple CEO Tim Cook will decide to approve a bigger stock buyback.

The revelation of Mr Icahn came as a surprise to U.S. Wall Street and drove Apple Inc's stock price up to $489.57, the highest in seven months based on Nasdaq figures on Aug 13.

The billionaire first announced his big investment on his Twitter account where he said he had a nice conversation with Apple Inc CEO Tim Cook and a follow-up conversation would be happening again soon.

Apple Inc confirmed the conversation with Carl Icahn took place but did not comment on the matter about the company's view on stock buybacks. Apple has neither confirmed nor denied if the talk between Mr Cook and Mr Icahn will influence management decision.

According to Reuters, Mr Icahn said that Apple Inc, maker of best-selling products like the iPhone, iPad and Mac computers, can make a $150 billion buyback possible if the company borrowed funds at a 3 per cent rate.

Mr Icahn said that if Apple Inc will pursue this option now and earnings will rise by 10 per cent, Apple's stock price could be as high as $700 per share. The billionaire investor believes that Apple has "huge buying power" with minimal debt.

Despite his revelation in Twitter, Mr Icahn declined to comment on the number of Apple shares he has. Before this latest Apple Inc news, Mr Icahn had attacked Michael Dell's efforts to take the company private for $25 billion.

A source who was asked not be named by Reuters said Mr Icahn's Apple Inc shares were worth $1 billion. This is only a fraction of Apple's market value estimated to be at more than $400 billion.

The Carl Icahn investment news boosted Apple Inc's shares but it is still below the record-high of $702.10 per share in September 2012 when the iPhone 5 was first launched. Since then, Apple investors were pummeled by growing fears of increasing competition with Samsung Electronics.

According to analysts, Mr. Icahn's interest in Apple Inc only proves the belief that investors will see an improvement to Apple's stock price hyped further by the anticipation of the announcement of the rumoured release of the iPhone 5S, iPhone 5C and newer iPads on September. The iPhone 5C is allegedly a cheaper iPhone which will be sold in emerging markets to spur Apple's market share growth.

Apple Inc CEO Tim Cook had previously said the company will release new products in new categories, but no details were revealed.

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