If investors were concerned about lackluster Apple Inc. (Nasdaq: AAPL) iPhone sales in the fourth quarter or disappointing guidance for 2018, they sure didn’t stay concerned for long. Apple stock once again hit a new all-time high on Wednesday, and GBH Insights head of technology research Daniel Ives says the market is right to ignore Apple’s short-term iPhone stumbles and focus on its bright long-term prospects.
According to Ives, negative near-term iPhone sales estimate revisions did little more than lower the bar for Apple in 2018 and set the stage for Apple to beat its new targets.
[See: 6 Reasons to Love Apple Stock in 2018.]
“With fiscal 2018 guidance now hittable/beatable and inventory issues in the rear-view mirror given recent data points out of Asia, it appears Apple shares are now on the yellow brick road to hit the elusive trillion-dollar club … over the coming months, in our opinion,” Ives says.
Even with Apple stock at all-time highs, Ives says the company’s trifecta of growth catalysts — China expansion, a strong 2018 iPhone upgrade cycle and nearly $300 billion in potential share buybacks — make the stock a buy at its current price.
“While many of the naysayers which threw in the white towel over the last month saying the ‘Apple growth story is over’ are now revisiting their thesis, we believe the risk/reward on shares is compelling and the iPhone upgrade thesis (albeit delayed with softer iPhone X demand) is alive and well in Cupertino with a prove me period clearly ahead,” Ives says.
GBH isn’t the only firm bullish on Apple stock. Apple shares got a boost this week after legendary Berkshire Hathaway ( BRK.A, BRK.B) CEO Warren Buffett mentioned Apple in an interview on CNBC Monday morning when asked which stock he would buy if he could only choose one.
[See: 7 of the Best Tech Stocks to Buy for 2018.]
“If you look at our holdings, you would assume that we like them in the order in which they rank by dollar value of holdings,” Buffett said. “But if you look at them in terms of recent purchases, over the last year we’ve bought more Apple than anything else.”
As of Buffett’s shareholder letter released last weekend, Berkshire held $28.2 billion in Apple stock, making the company Berkshire’s second largest holding.
GBH Insights has a “highly attractive” rating and $205 trice target for AAPL stock.
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Apple Inc. (AAPL) Stock Is Back On Track originally appeared on usnews.com
