Wells Fargo Out Bullish on Apple (AAPL) Seeing Enterprise Mac Adoption at an Inflectinon Point
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Wells Fargo analyst Aaron Rakers reiterated an Overweight rating and $205.00 price target on Apple (NASDAQ: AAPL) noting Macs could be at a point of inflection for adoption within the enterprise / commercial market. This is very significant since Mac revenue only accounts for ~10% of total revenue. Three reasons are cited for the thesis:
1) Apple's ability to leverage the proliferation of the internally-developed M1-series (Arm-based) processors across its Mac lineup; common silicon / OS platform across product portfolio
2) Expanding adoption of as-a-service offerings (e.g., Apple Business Essentials to become fully available for SMBs w/ up to 500 employees in spring2022)
3) Demographics and expanding support for choose-your-device employee optionality
The analyst stated "several anecdotes from large tech companies on the performance& productivity improvements offered by M1 Macs, specifically for software development workloads, where Apple punches above its weight (e.g., ~30% of devs on Stack Overflow use MacOS vs. Apple's overall ~8-9% PC ship share). Internal benchmarks from companies such as Square and Reddit found that the M1 MacBook Pro reduced app build times(code compiling) by more than 50% relative to the prior year’s Intel-based MacBook Pro.When this productivity increase is scaled across a large enterprise/organization with hundreds of developers, the savings could justify upgrading entire fleets of Macs, perhaps sooner than dictated by the typical 3-4 yr. upgrade cycle. We estimate that the Mac installed base could be ~140M today, including ~55-60M commercial Macs (est.~40% of the installed base). Other companies that have publicly announced upgrades toM1 Macs include Uber, Shopify, SAP, and Mass Mutual."
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $174.83 yesterday.
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