AmTech's Wu pulls 180, reinstates Buy rating on Apple shares

"We overestimated the potential negative reaction on the quarter and in hindsight should have moderated our near-term posture rather than downgrading," the analyst conceded in a note to clients. "While Apple shares will likely remain volatile and may offer a better entry point, we need to align our rating with our longer term view on fundamentals."

Although Wu maintains that "a potential product vacuum and draw-down in inventory" are likely during the current quarter, he now believes investors are routinely aware of those circumstances and have since looked past them in anticipation of new product launches during the second half of the calendar year.

Among those product launches, the analyst said, is 3G iPhone transition in the June/July timeframe, and a complete overhaul of the company's mainstream notebook offerings during the September quarter.

Echoing details from a report originally published by AppleInsider last month, Wu cited his own sources in saying that both the MacBook and MacBook Pro would see a major redesign with styling to match new iMac and MacBook Air.

"While MacBook and MacBook Pro have done well, there has not been a form factor refresh since 2001-2002," he wrote.

As a result, Wu upgraded shares of Apple to Buy from Neutral and instated a new 6-12 month price target of $210 per share (up from $175).

"Considering our bullishness on the macro trends [...] and assuming great management execution continues, Apple has earnings power significantly beyond consensus estimates," he added. "We think calendar year 2009 earnings is more likely closer to $7.50-8.00 than the $6.59 consensus estimate."