Technology

Wedbush: Apple (AAPL) iPhone 12 ‘Supercycle Reality Meeting Hype’

AAPL stock has up to 46% additional upside, says Wedbush's Ives, as ‘Cook & Co. have the stage set for a supercycle 5G product release.’

Apple's (AAPL, $133.72) stock price was up modestly today on the back of an analyst note from Wedbush's Dan Ives saying that supply chain checks for iPhone 12 units "have now exceeded even our 'bull case scenario' for units in FY21."

"Based on our recent Asia checks we believe the supply chain is anticipating low to mid 90 million iPhone unit builds … a roughly 35% increase from our original and Street forecasts," says Ives, who covers AAPL stock for Wedbush.

Compare that to the firm's expectations for iPhone 12 unit sales over time. Three months ago, Wedbush expected 65 million to 70 million unit builds for the December quarter; it raised its outlook to 75 million units in late October; and in mid-December, it set a "stretch goal" in the mid-80 million range.

Momentum for Apple's foray into 5G technology is building for the March quarter, too. "Builds for total iPhones ticked up again another 5% over the last week and are now in the 60 million to 70 million range," Ives says.

Wall Street broadly sees AAPL selling 217 million iPhones in the company's fiscal 2021, but Wedbush's bull case is "north of 240 million units (250 million could be in the cards – an eye popping figure)" that would easily surpass the 231 million units the company sold in its fiscal 2015.

"We have not seen a launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis."

Driving strength is China, which Ives calls a "linchpin to Apple's 5G supercycle." The country is providing "considerable strength" in sales, and trends appear to be positive heading into 2021.

AAPL stock set a new closing high of $136.69 per share on Dec. 28 and continues to trade close to that level amid continued optimism over this iPhone cycle. Wedbush's Ives maintained his Outperform rating (equivalent of Buy) and a $160 price target – a 17% gain from Wednesday's closing price. However, he sees a bull-case price target of $200, or 46% potential upside, for Apple's shares.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock recommendations and other investing advice.

Most Popular

In What Order Should You Tap Your Retirement Funds?
retirement planning

In What Order Should You Tap Your Retirement Funds?

Should you go with your IRA first or your brokerage account? Pulling money haphazardly can have negative implications. Instead follow this road map fo…
June 28, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
An Easy Way to Find How Much You Will Spend in Retirement
retirement planning

An Easy Way to Find How Much You Will Spend in Retirement

One simple math equation can help you determine where to start building your retirement income plan, and whether your money should last.
June 27, 2022

Recommended

Kiplinger's Weekly Earnings Calendar
stocks

Kiplinger's Weekly Earnings Calendar

Check out our earnings calendar for the upcoming week, as well as our previews of the more noteworthy reports.
June 24, 2022
10 Smart AI Stock Picks
tech stocks

10 Smart AI Stock Picks

AI stocks have been bloodied up in 2022, but the technology's relentlessly growing importance should see the sun shine on them again.
June 23, 2022
The Murky Rules Behind Financial Apps
Technology

The Murky Rules Behind Financial Apps

"Neobanks" and other fintechs operate in a regulatory gray area, with less oversight. That can sometimes leave customers in limbo when there's a probl…
June 13, 2022
7 Tempting Tech Stocks With Above-Average Dividends
tech stocks

7 Tempting Tech Stocks With Above-Average Dividends

Investors seeking out both growth and enticing yields may want to consider these seven tech stocks with dividends.
June 8, 2022