There’s a “once in a decade opportunity” lying in wait for Apple (AAPL), says Wedbush analyst Daniel Ives. Accordingly, Ives expects the tech giant to grab the opportunity and run with it.
Driving the analyst’s bullish outlook is the soon-to-be-launched iPhone 12 – Apple’s first to boast 5G capabilities.
Recent supply chain checks indicate to Ives that there is pent up demand in Asia for the new version of Apple’s flagship product. The analyst’s team in the East say there’s a “discernible uptick in forecasts for iPhone 12.”
The Asian market, and China specifically, make up a big chunk of Apple’s revenue.
“China remains a key ingredient in Apple’s recipe for success as we estimate roughly 20% of iPhone upgrades will be coming from this region over the coming year,” Ives said.
Overall, the analyst thinks 350 million of the 950 million global iPhones are due for an upgrade during this “super cycle.”
However, the iPhone is not the only ace in the Apple pack. Apple Services – which includes the App Store, Apple Pay, Apple TV+ etc. – plays a big part in the Apple story. Ives believes the Services segment is in the “$700 billion to $750 billion valuation range,” and expects it to bring in over $60 billion annually over the next few years.
Apple shares have surged to new heights on an almost daily basis recently. Last week’s “guns-a-blazin’” FQ3 earnings report acted as the latest catalyst to send shares higher. However, Ives argues the Street has yet to fully appreciate how meaningful the upcoming 5G launch will prove to be.
“We still believe many on the Street are underestimating the massive pent-up demand around this super cycle for Apple, which remains the opportunity for the bulls as the $2 trillion dollar market cap threshold is now within grasp with a lot more fuel left in Cupertino’s tank heading into 2021,” the 5-star analyst concluded.
Ives’ confidence in Apple’s continued success is rewarded with a new price target – the figure moves from $475 to $515. The implication for investors? Upside of nearly 18%. Ives’ Outperform (i.e. Buy) rating stays as is. (To watch Ives’ track record, click here)
Not everyone agrees with Ives’ confident take, although Apple’s fan base on the Street remains strong. Backed by 23 Buys, 6 Holds and 2 Sells, Apple has a Moderate Buy consensus rating. However, analysts expect shares to decline a modest 1.23%, as implied by the $432.12 average price target. (See Apple stock-price forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
