Apple could be just a year away from being worth $4 trillion
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.
Apple MixC Wenzhou
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."
Read on AppleInsider
Comments
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.
My shares I bought in 2010 have profited nicely, and I am grateful I didn't sell. But if I did, I can always buy back in and reap the rewards now. Come on back! The water's fine!
I ask them, "What do you have that has had doubled every 3 years for the last 15 years?" - 15 year total return of 6071% (actual 3 year doubling would be 6400%)
They go back to their sales pitch about annuities and other investments. Yes, I know that having all my eggs in one basket is risky, but I have eggs elsewhere too.
No growth stoy... At least in 2024.
How can this company be valued as $4 trillions without any growth rates??
I have argued several times: AAPL will underperform this year. We will be talking about Magnificant Five w/o AAPL and TSLA.
By the way: Warren Buffett trimmed 10M AAPL stocks (just 1%, but who knows? He might trim more and more... Let´s check F13 after Q1 2024..).