UBS Ponders If Apple (AAPL) Is An "Antifragile Monopoly"

UBS maintains Buy on Apple (NASDAQ: AAPL) price target of $151.00.

Analyst Steven Milunovich channels his inner Nassim Taleb in a note to clients Wednesday saying competition makes Apple a hardier firm. Milunovich mentions Horace Dediu also, a well-known Apple observer, and notes that Dediu believes that Apple's market position is less fragile than it would appear on first glance.

"He argues that Apple's position is less fragile than it first appears, which investors are picking up on with increased emphasis on services and the installed base. Although Apple is viewed as less powerful than its large cap tech brethren, it exhibits superior pricing power. Indeed, Warren Buffett has been convinced that Apple has a moat similar to Coke and Wells Fargo."

Speaking to Taleb's antifragility, Milunovich writes (emphasis ours): "Antifragility is Nassim Taleb's concept and refers to things that benefit from volatility and change. We have applied antifragility to our group and to Apple specifically. Horace makes the case that because Apple may face more threats than FANG, it is developing a greater ability to compete and adapt. He says its three competencies are (1) an ability to be either integrated or modular as circumstances require; (2) a relentless focus on the job to be done; and (3) being in a constant state of high competition keeps attention on the product. Conversely, problem signs would be complacency, platform mistakes, or unwillingness to cannibalize itself. Horace points out that Apple always has been a single-product company but the product changes."

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 $139.00 yesterday.

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