Apple (AAPL) stock has been on quite a run over the past few months, with renewed hype surrounding potential product innovations beyond the firm’s flagship iPhone. Most notably, an upcoming mixed-reality headset and a potential autonomous car that could be farther out.
There hasn’t been this much to get excited about with AAPL stock in quite some time. With the stock fresh off an 8% decline, Apple may have the stage set for a glorious rest of 2022, as we inch closer to Apple’s next big innovation. As such, I am bullish on Apple stock.
2022 Looks Quite Bright for Apple
Indeed, supply chain hiccups and all the sort are due to fade alongside COVID-19 cases and disruptions.
Thus far, Apple has done a relatively decent job of navigating through the tough waters of 2021. Moving forward, Apple will have a chance to meet the pent-up demand for its latest line of devices (think the iPhone 13 and the latest 14″ Macbook Pros).
Meanwhile, the company could begin to start making noise in one of the hottest tech sub-categories of late: the metaverse.
Undoubtedly, Apple hasn’t typically adopted the role of first-mover when venturing into new technological realms.
Many firms that came before Apple have tried, with limited success, to break through into the market of smartphones over a decade ago. Indeed, Apple was fine with not being the first in a new field. By letting someone else get into a market first, it had a chance to learn from the inevitable mistakes of the first-movers and adjust accordingly.
The result? A more polished product that consumers cannot get enough of. Or, in short, a novel innovation ready for prime time.
When Apple launches a new product, whether it be the iPad or Apple Watch, it means business to the magnitude of millions of sales. Undoubtedly, Apple isn’t looking to sink cash into an emerging field if there’s not a substantial economic profit to be had or if “prime time” is still distant.
The same can’t be said of some of its peers in the FAANG cohort.
Alphabet (GOOG)(GOOGL) is one firm that still has its startup mentality intact. It’s willing to try new things on the cutting edge of innovation, even if it means disappointing consumers from time to time (think the Google Glass) and sinking ample amounts of cash flow.
The Metaverse Is Coming: Start Your Engines
As we move into the metaverse, Meta Platforms (FB) is shaping up to be the first mover. Undoubtedly, Apple will be paying very close attention as it observes its rival’s incredibly expensive multi-billion investment to build its metaverse.
According to some analysts, Apple could be ready to pull the curtain on its mixed-reality headset as soon as late 2022. It won’t be the first to unleash such a VR/AR headset. Meta has been in the VR headset space for many years, with the acquisition of Oculus many years ago.
However, the million-dollar question is could it be the first iteration of a headset that a majority of consumers own in the future? It could be. That’s why investors are so excited.
Arguably, Meta has yet to produce a blockbuster product, at least according to Apple standards. Was the Oculus acquisition a flop for Meta? Or, has it provided a foundation for Meta to break into the metaverse in the mid-2020s? Only time will tell. For now, many seem skeptical.
Wall Street’s Take
Turning to Wall Street, AAPL stock earns a Strong Buy consensus rating. Out of 26 analyst ratings, there are 21 Buys, four Holds, and one Sell recommendation.
The average Apple price target of $177.20 implies 2% upside potential. Analyst price targets range from a low of $90.00 per share to a high of $210.00 per share.
The Bottom Line on Apple Stock
Although a recent report stated that Apple isn’t building a full-fledged metaverse, with a focus on “short bursts” of usage for its new powerful headset, I do think that Apple is wise to dip a toe into the metaverse, rather than seeking to make a massive splash as Meta is doing with its metaverse investment.
Will Meta or Apple dominate the metaverse of the future? My money would be on Apple. Its slow and steady move forward makes its venture into new realms far less risky, in my books.
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