Apple Stock: These Opportunities Could Drive AAPL Stock

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Written By Chris

At the moment driving a supercycle of smartphone upgrades because of its 5G iPhones, Apple (AAPL) has 5 development alternatives that might take Apple inventory to the subsequent stage, a Wall Road analyst says.


In a be aware to purchasers late Thursday, Evercore ISI analyst Amit Daryanani reiterated his outperform ranking on Apple inventory. He provides it a “base case” worth goal of 210. He additionally outlined a set of multibillion-dollar alternatives that might push Apple inventory to his “bull case” goal of 300.

On the inventory market in the present day, Apple inventory rose 0.4% to 174.72. IBD MarketSmith charts present that Apple inventory is approaching a purchase level of 176.75 out of a double-bottom base.

Daryanani says the 5 development alternatives for Apple are promoting, funds, well being care, augmented actuality/digital actuality, and the rumored “Apple Automotive.”

Apple Inventory Wants New Markets To Conquer

For Apple inventory to maintain and even develop its present valuation, buyers have to see the corporate prolong its platform and monetize its rising ecosystem, Daryanani stated. The 5 key development initiatives all have the potential to influence Apple’s prime and backside strains at scale, he added.

In promoting, Apple may develop the enterprise from about $2 billion in gross sales now to $20 billion in fiscal 2025, Daryanani stated.

In funds, Apple is probably going so as to add a buy-now-pay-later choice to its Apple Pay enterprise, he stated. Extra monetary providers are certain to observe, Daryanani famous.

Well being care is probably the most important potential supply of development for Apple however the firm’s focus stays unclear, he stated. Its present focus in well being care is across the well being and health options of the Apple Watch and its Health+ service.

Apple Headset To Debut

Apple’s subsequent new {hardware} play is prone to be in AR/VR units, Daryanani stated. Primarily based on information leaks, Apple is prone to come out with a digital actuality headset later this 12 months. That may be adopted by augmented actuality glasses in 2023 or 2024 on the earliest, he stated.

Apple’s AR/VR enterprise may scale to $20 billion in gross sales inside 5 years, he stated.

Additional out, Apple is prone to introduce its personal electrical automotive, Daryanani stated. He forecasts that enterprise including $36 billion in gross sales. He additionally sees $5.5 billion in earnings earlier than curiosity and taxes from that automotive in its fifth 12 months.

Apple Inventory Has Excessive IBD Composite Score

These rising development alternatives add to Apple’s present development drivers in providers and wearables, Daryanani stated.

“Apple stays positioned to maintain mid/excessive single-digit gross sales and midteens EPS development over subsequent a number of years with much less volatility and better consistency,” Daryanani stated. “We anticipate Apple’s valuation to maintain ranges akin to shopper staple property vs. fears we revert to (ranges akin to) {hardware} friends.”

Apple inventory has an IBD Composite Score of 94 out of 99, based on IBD Inventory Checkup. IBD’s Composite Score combines 5 separate proprietary scores into one easy-to-use ranking. The most effective development shares have a Composite Score of 90 or higher.

Comply with Patrick Seitz on Twitter at @IBD_PSeitz for extra tales on shopper expertise, software program and semiconductor shares.


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