Investors are becoming more gloomy about IT companies, and specifically about Apple (AAPL). Tuesday marked the first time since last spring that the company’s market worth fell below $2 trillion.
“The biggest enemy on Wall Street is technology. And Apple has a target on its back because to worries about decreasing demand through 2023, according to Ives, who spoke with Yahoo Finance. The overall demand climate, however, is more resilient than the Street anticipates, he added in the investors note.
Wedbush Securities’ Dan Ives concurs with their worries. He reduced his price objective for Apple from $200 to $175 in a message to investors. But the company still gives the stock an Outperform rating, and Ives is still bullish about the stock’s future.
In 2022, Apple demonstrated greater resiliency than other tech companies. For instance, while Netflix (NFLX) and Facebook (META) saw declines of over 50% and 70%, respectively, the company’s stock fell by about 30%. In the company’s most recent earnings report, revenue increased by 8% year over year to $90.1 billion, above analysts’ estimates by 1.51 billion.
Apple, though, still faces difficulties. COVID- Analysts worry that the company may experience a decline in demand as a result of inflationary pressures and 19 limitations that have continued to hamper the company’s supply chains in China. Like the rest of the nation, it has experienced anxiety of a recession and endured corporate layoffs — the company laid off 100 contract workers in August.
Apple continues to be the tech bears’ major focus because the company has fared better than the rest of the industry throughout the recent downturn, according to Ives.
But Ives is optimistic that the business will continue to have a healthy level of demand.
Ives wrote in the investor’s note that although 8 to 10 million iPhone units were delayed from the December quarter owing to supply chain problems, this should help the March quarter instead because the demand is not expected to disappear until 2023.
He also cited the company’s robust worldwide installed base, which S&P Global Market Intelligence estimates will increase by 9.9% annually to just over 2 billion in 2022. Because of its installed base, “our judgement is that it’s a Rock of Gibraltar stock that’s going to hold up better than the rest of tech,” Ives told Yahoo Finance.
Ives noted in his note that Apple has more than 200 million iPhones that haven’t received an upgrade in about 4 years and that the company has a number of intriguing product launches coming up. For instance, the iPhone 15 and Apple Glasses will debut in 2023. According to Bloomberg’s research, the former, which has been in development for seven years, has particularly intrigued investors and consumers alike. Ives acknowledged that economic challenges like inflation could be detrimental to the business, but he insisted that Apple was still his favourite tech brand.
Everyone will be hit in this macro, Ives said. “I simply think that these worries are more terrifying than the truth.”
- It’s a Rock of Gibraltar, claims Dan Ives of Wedbush
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