"We view Apple as both a Rock of Gibraltar defensive tech name as well as the best 5G tech play in the market."
From a note to Wedbush clients that landed on my desktop Sunday:
This Tuesday Apple will have another virtual event in which we expect the company to launch its third iPhone SE along with a revamped iPad Air and likely a new Mac version. Taking a step back, with technology and automotive companies around the world cutting production/introducing new products, in a stark contrast Cupertino is again unveiling more new products to hit the shelves and thus speaks to the nearly Teflon-like ability of Cook & Co. to navigate this unprecedented supply chain shortage globally.
The highlight of the virtual event this week will be the iPhone SE starting likely at $399 price points with a new A15 Bionic chip and 5G capability. We do not expect major hardware design changes, as the Apple chip upgrade and 5G will be the headline of the event to further catalyze upgrades during this massive iPhone 13 led product cycle.
30 million units for iPhone SE could be conservative out of the gates. We estimate this new iPhone SE can translate into 30 million+ incremental units over the next year as globally there is pent up demand for this next SE based on recent supply chain checks. For the low price point and new specs/speed with multiple storage capabilities (64GB, 128GB, and 256GB), we believe the value proposition for consumers is a "standout" relative to competitors and could translate into some further Android share gains...
Overall in this volatile geopolitical climate with a general risk-off preference among investors as the horrific and heartbreaking Ukraine invasion causes market jitters, we believe Apple is a safety tech name to own during this market storm. We view Apple as both a Rock of Gibraltar defensive tech name as well as the best 5G tech play in the market with a massive product cycle that is gaining more steam along with its valuable services business which is being undervalued by the Street in our opinion.
Maintains Outperform rating and $200 price target.
My take: Robert Leitao and I are hosting a post-Peek performance Zoom call after Tuesday's event (subscribers-only). The fun starts at 12 noon Pacific, 3 p.m. Eastern. If you want to attend but haven't yet raised your hand, email me at firstname.lastname@example.org with "peek" in the subject line.