Malcolm Owen
Apple's supply chain checks show there are fewer cuts to orders than they expected at this time of year, with Dan Ives of Wedbush Securities saying that because of it, Apple will have a tremendous year.
On February 4, Wedbush released a note to investors claiming there were signs of a possible "product renaissance" for Apple. In a TV appearance on Monday, Wedbush managing director Dan Ives continued to press forward on that idea.
Initially discussing supply chain checks and if Apple's China business is stabilizing or growing, Ives said on CNBC Squawk on the Street that the accuracy of the checks have become "more accurate than not," at least in relation to demand.
Ives insists that the iPhone demand has stabilized and possibly increasing in the country. Crucially, when Ives looks at the supply chain checks, he claims that there are not major cuts in the pipeline.
Apple's move to AI
Referring to the change as a "Super Bowl moment," Ives calls it the "lead-up to AI," which includes the creation of a supposed AI App Store. Ive also believes there will be an increase in memory used on devices, all to help with on-device AI processing.
Ives also claims that Apple's stock is also up in the quarter because Wall Street recognizes the "AI Revolution is now coming to Cupertino." This revolution will also apparently include the use of LLMs in the iPhone 16.
Apple's AI work could be extremely lucrative, with Ives pointing out the 2.2 billion iOS install base that could benefit greatly from the AI App Store.
The AI changes will greatly improve the Services unit, with developers continuing to flock to Apple's platforms for creating apps with AI elements.
Mentioning the Apple Vision Pro, Ives calls it the "tip of the iceberg to what I view as the AI revolution."
When asked about the potential success of the Apple Vision Pro hardware, Ives says he's heard of conversion rates of three to four purchases for every ten demonstrations of the headset. He adds that Wedbush thought there would be 300,000 units of Apple Vision Pro sold for the entire year, but now the forecast is for 600,000.
At the end of the interview, Ives reiterates his belief that Apple will hit a $4 trillion market cap in a year. The firm has offered the view of a $4 trillion market cap for a while, with notes from December predicting the milestone happening within a year.
Wedbush has a $250 price target for Apple stock, and rates it as "Outperform."
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Charles Martin
William Gallagher
Christine McKee
Wesley Hilliard
Andrew Orr
9 Comments
Regardless of whether this happens, I feel like a dummy since I got out of investing in Apple many years ago under the false premise that once it hit $1T that stock price increases would be slow as a percentage of my investment. My hat off to those that stuck with it through $3T and I hop you make it to $4T this year.
How does that benefit users.
The App Store has gotten so bad it's become a place to visit find what you need and leave as quickly as possible. Finding new stuff is a horrible experience that yields little fruit. The advertising started out as a small nuisance and that has expanded to a half screen sized block showing what you did "not" search for.
Apple is certainly managing things better than most Fortune 100 companies but quite honestly from a User Experience context most of these companies are failing. I never thought in a million years Microsoft would screw Office up to the point where it's cringe to use but we are here.
I hope the young kids getting into Computer Science realize the black hole that a lot of these companies chasing Wall Street valuations have fallen into an aspire to return to the roots of what propels most human advancement and that's doing things motivated by the greater good.
I’ve been invested in the market, especially Apple/AAPL, for over 20 years.
I'm glad I just kept buying since 2004, but now just selling the past year and a half to enjoy retirement. AAPL was the luckiest/smartest thing I ever did. 😀