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Despite supply issues, Apple is geared up for a "monster growth cycle" for 2022 that isn't currently baked into its share price, according to a Wedbush analyst.
Although component shortages are still plaguing Apple, Ives says he is seeing discernible improvements in the company's supply chain heading into the June quarter — a fact that bodes well for Apple's "
China remains a critical region for Apple, and the company is gaining ground there. Wedbush estimates that Apple gained roughly 300 basis points of market share in the past 12 months on the heels of the 5G-equipped iPhone 12 and iPhone 13 lineups.
"While the supply chains issues have curtailed some growth (around 15 million iPhone units) for Apple over the past few quarters on this massive product cycle playing out across its entire hardware ecosystem," the analyst writes. "We believe the pent-up demand story is still being underestimated by investors."
Apple remains a clear favorite among technology, cloud, and cybersecurity stocks, which Ives calls "oversold" categories. The analyst said he strongly recommends investors buy and hold stalwarts in these areas.
Ives maintains his Outperform rating for Apple and 12-month price target of $200, which is based on a sum-of-the-parts valuation on the banks 2022 estimates. The valuation includes an 18x multiple on Services at $1.5 trillion and a 7x multiple on Apple's hardware business at $2.2 trillion.