Morgan Stanley analyst Katy Huberty says that strengthening iPhone and iPad sales data runs counter to Apple’s recent stock performance. Huberty points to supply chain data points which suggest healthy iPhone demand and potential upside to Morgan Stanley’s June quarter iPhone forecast. Apple’s supply chain in Taiwan saw sales increase 13% Y/Y in April, according to the analyst, which is the seventh consecutive month of Y/Y revenue growth following the launch of iPhone 12 family.
Philip Elmer-DeWitt for Apple 3.0:
From a note to clients that landed on my desktop Wednesday:
Our Asia supply chain team recently raised their June quarter iPhone build forecast to 44.5M up from 43.0M due to stronger than expected demand for iPhone 12 Pro Max. We currently forecast 41M units, ~3M units below what is implied by the historical relationship between iPhone builds and shipments (44.3M) (9).
The team also raised their iPad build forecast to 16.8M up from 16.0M previously. We forecast 13.5M iPad shipments compared to the 17.6M implied by the builds, given expected supply constraints…
While we need to watch App Store growth over the coming months, we believe Apple’s recent underperformance is likely overdone (-6.5% since earnings vs. the S&P 500 -0.5%) given the improving iPhone and iPad data points.
MacDailyNews Take: As we’ve long maintained, Apple stock remains significantly undervalued. It’s almost as if people can’t quite wrap their minds around Apple’s revenue generation capacity or allow themselves to believe that it will continue to grow for the foreseeable future and, very likely, well beyond.