Apple’s Integrated Ecosystem Takes the Cake, Says Top Analyst
Stock Analysis & Ideas

Apple’s Integrated Ecosystem Takes the Cake, Says Top Analyst

Apple (AAPL) kicked off its annual developer conference on June 22, a virtual event in true 2020 style. As expected, the tech giant announced new developments and software updates.

Oppenheimer analyst Andrew Uerkwitz logged in to get the lowdown. The 5-star analyst logged off with some key takeaways in tow.

Among the new features announced for iOS 14, the latest software update, Uerkwitz sees the introduction of App Clips as the most significant. The feature gives users access to certain functions of an app without the need to download it first or create an account.

“With integrated Apple Pay, the feature will enable a more seamless and accessible digital and physical experience,” Uerkwitz noted.

Other new features include improved Home Screen navigation, a data rich Widget, a picture-in-picture feature (which plays a small video in the screen’s corner while the user performs other tasks), and a makeover for the Siri interface.

Apple also confirmed it will begin using its own processor in Macs for the first time, discarding the Intel x86 processors it had previously relied on. The move to Apple’s ARM processors will begin later this year with the release of the first Apple Silicon powered Mac. It should be noted that the transition process is expected to last two years.

Marking the first step of integration between MacOS and iOS ecosystems, the move could prove to be a significant catalyst.

Uerkwitz said, “The historic move validates our view that Apple is creating a wide moat for its own ecosystem by deeper integration of hardware and software, and broader integration across all of its hardware devices… A shared hardware-software architecture across Apple devices will likely benefit existing users, encourage more purchase within the ecosystem, and amplify the network effect for App Store and its third-party developers.”

All in all, Uerkwitz has an Outperform rating along with a $320 price target on the stock. The figure reflects downside potential of 12%. To be fair to Uerkwitz, even for an Apple bull, it is currently hard to keep up with the stock’s price. Apple’s share gains are coming in thick and fast, and the stock is currently at an all-time high, yet again. (To watch Uerkwitz’s track record, click here)

The rest of the Street is playing catch up, too. The analyst consensus rates Apple a Strong Buy based on a resounding 28 Buys versus 6 Holds and 1 Sell. However, the $350.41 average price target implies shares could drop by 4% in the coming months. (See Apple stock-price forecast on TipRanks)

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