Wedbush Reiterates Outperform on Apple (AAPL) as iPhone 12 Demand Looks Robust

Wedbush analyst Daniel Ives has reiterated his bullish stance on Apple (NASDAQ: AAPL) as the smartphone supercycle, driven by strong demand for iPhone 12, is underway.

According to Ives, the latest Asia supply chain checks show extremely strong demand for iPhone 12 with the latest data pointing towards a strong quarterly report.

“We believe Apple saw a robust holiday season not just on iPhones, but also had a strong AirPods performance that will be another product tailwind for Cook & Co,” Ives wrote in a note sent to clients today.

The supply chain witnessed low to mid 90 million iPhone unit builds for the December quarter. This translates into “incremental confidence in our supercycle thesis on iPhone 12,” according to Ives.

“To put this in context, in mid December we had this in the 80 million range with a stretch goal in the mid-80 million range and heading into late October we were anticipating 75 million units as the line in the sand and roughly three months ago we estimated 65 million - 70 million units. This is roughly a 35% increase from our original and Street forecasts.

“For the March quarter we believe builds for total iPhones ticked up again another 5% over the last few weeks and are now in the 60 million to 70 million range. For the June quarter we believe initial builds are in the low 40 million range with potentially an upward bias. 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,” the analyst wrote.

Based on these calculations, Apple has potential to sell north of 240 million units, or even up to 250 million units. As in previous cycles, China remains a key market for the tech giant.

“China remains a key ingredient in Apple’s recipe for success as we estimate roughly 20% of iPhone upgrades will be coming from this region over the coming year. To this point, we are seeing considerable strength from the China region thus far with positive trends heading into 2021.”

Ives has maintained his $160 price target with the bull case price target sitting at $200.00 “ given our belief if Apple continues to execute at this pace, a $3 trillion market cap could be on the horizon over the 12 to 18 months,” the analyst concludes.

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 $128.99 yesterday.

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