Apple's stock price started poorly in 2024 and was criticized by Wall Street institutions, including Goldman Sachs. However, Dan Aives, an analyst at well-known US investment bank Wedbush Securities, said that investors have at least five reasons to continue to be bullish on Apple.
So far this year, Apple's stock price has fallen by about 9%. Aives believes that this is a buying opportunity for investors.
According to research firm Counterpoint, in the first six weeks of 2024, Apple's best-selling product, the iPhone, saw a 24% year-on-year decrease in sales in China. Apple's stock price fell by over 2% on Tuesday.
Aives said that his recent trip to Asia did confirm the weak sales of the iPhone 15, and the discount offered on this phone also proves this. In addition, Apple's iPhone sales in China will still face some severe competitors in the next two quarters.
In a report on Tuesday, he said, "Overall, maintaining stable iPhone sales remains the goal for this year."
However, according to this report, Avis continues to be optimistic about Apple, mainly due to the following five factors:
The current expectation for iPhone sales in 2024 is still acceptable, while the expectation for 2025 is relatively conservative.
During the upgrade cycle of iPhone 16, the suppressed demand may exceed 270 million units.
3. Apple's service industry business remains solid, achieving double-digit growth, which is key to supporting valuation.
Based on our understanding in this field, artificial intelligence will eventually enter Apple in the form of new app store enhancements and be integrated into the iPhone 16.
"Apple has 2.2 billion iOS devices, making it the most powerful company in the world in terms of installation infrastructure. The next phase of profitability is imminent."
In short, the current data is not optimistic for Apple, and risks still exist. However, our view is that in the next 1-2 quarters, Apple will face easier competition, announce a stronger upgrade cycle for artificial intelligence and iPhone 16 at WWDC (Apple Global Developers Conference), as well as more profit opportunities brought by the company's solid user base.
"The prospects for Apple will be even brighter, although the current sales situation in China is still a dark cloud hanging over the company in the short term," he added.
Finally, Avis reiterated his rating of Apple as "outperforming the market" and his target price of $250, which means the stock has a potential 47% upward potential at current levels.