Apple’s fiscal Q321 (June quarter) report provided continuing evidence that the company is in the midst of a multi-year iPhone supercycle as the huge one billion-plus iPhone installed base upgrades to its 5G handsets.
Apple’s iPhone business generated $39.6 billion in revenue in the company’s fiscal third quarter ended June 26. That easily topped Wall Street’s target of $34.2 billion. The iPhone business accounted for 48.6% of the company’s total revenue in the June quarter.
IPhone revenue rose 50% year over year during that period after rising 66% in the March quarter.
The “supercycle thesis continues,” Wedbush Securities analyst Daniel Ives said in a note to clients. He rates Apple stock as outperform with a price target of 185.
“Apple is benefiting from the 5G upgrade cycle, which we think is likely to continue for at least another two years,” Piper Sandler analyst Harsh Kumar said in a note to clients. Apple came out with its first 5G-enabled smartphones, the iPhone 12 series, in late 2020. Analysts expect it to unveil its second-generation 5G handsets, the iPhone 13 series, in September.
Kumar reiterated his overweight, or buy, rating on Apple stock and raised his price target to 165 from 160.
Jefferies analyst Kyle McNealy maintained his buy rating on Apple stock with a price target of 175.
“We think the Street still underappreciates Apple’s opportunity with 5G,” McNealy said in a note to clients. “There’s much more to come, as we’re only in the initial innings of Apple’s 5G adoption cycle and upgrade rates remain at the low end of the historical range.”
MacDailyNews Take: Yet, Apple stock has slipped on the glum outlook of only “very strong double-digit growth.”
Buy low, sell high.
“iPhone 5G” will herald the Mother of All iPhone Supercycles. — MacDailyNews, December 18, 2019