Investors have been watching Apple (NASDAQ:AAPL) shares in an uncharacteristic lull over the past three months. After being caught in the September tech stock selloff, AAPL stock has struggled to break above the $120 level. However, don’t expect that situation to last. Apple products like AirPods are a hot gift item during the holiday shopping season. The iPhone 12 is also seeing robust demand, and the new M1 processor for Macs is making headlines. As a result, AAPL stock just received upgrades from multiple analysts.
Apple stock popped on Monday on the news of upgrades, closing at $119.05 for a 2.1% gain. So if you want to get back onboard the AAPL stock train before it leaves the station, now is the time to do it. This “A-rated” stock is going to be on the move, and it’s not likely to get any cheaper.
Wedbush Paints a Rosy Picture for AAPL Stock
Apple shares started out last week on a negative note, with AAPL stock sliding nearly 3% to close at $113.85 on Nov.23. However, that latest dip didn’t last for long.
Wedbush Securities analyst Daniel Ives issued a research note that painted a rosy picture for Apple. In it, Ives pointed out the incredible success the company continues to have with AirPods, which are expected to be a big seller again during the holiday season. He calculates the wireless earbuds are on a trajectory to account for over 5% of Apple’s overall revenue:
“We estimate that Apple is on pace to sell over 90 million AirPods units in 2020 and is now on a trajectory to potentially reach 115 million units in 2021 with a new version slated to be unveiled in the April/May 2021 timeframe.”
More importantly than the AirPods popularity streak, Ives notes that demand for the iPhone 12 is high, including in the Chinese market. In addition, the Pro versions of the iPhone 12 are selling strongly, which means higher ASP numbers for Apple. Ives writes:
“We believe pre-orders tracked more than 2x its predecessor iPhone 11 thus far and is a robust start out of the gates for Cupertino on this flagship supercycle product.”
Additionally, Ives’ research pegs the number of iPhones worldwide currently within an upgrade window at between 350 million and 950 million units. This opens the possibility of an “unprecedented” upgrade super-cycle — something the early iPhone 12 sales indicators are supporting.
Overall, though, Ives maintained his “outperform” rating for AAPL stock, with a $150 price target.
Analyst Upgrade on Monday
Moreover, Wedbush isn’t alone in its bullish outlook on Apple. On Nov. 30, it was reported that both Loop Capital and Morgan Stanley had released research notes that spiked out strong iPhone 12 sales.
Loop upgraded its rating on AAPL stock to Buy from Hold, while raising its price target to $131. Morgan Stanley analyst Katy Huberty maintained her Overweight rating and $136 base-case price target. However, she raised her bull-case price target from $171 to $191, writing:
“Our conviction in the AAPL bull case is rising with iPhone 12 Pro lead times at record levels, upward revisions to supply-chain forecasts, and U.S. carriers noting strong initial demand.”
In turn, AAPL stock popped 2.1% on Monday — buoyed by the analyst commentary and upgrades.
Bottom Line on AAPL Stock
Collectively, the latest round of analyst research has been largely focused on the iPhone 12 and AirPods. These are hot products, and the iPhone in particular is critical to Apple’s success. However, don’t forget that other Apple product lines are also firing on all cylinders.
For the first time, the company is going into the holiday sales quarter with a lower cost “SE” version of the Apple Watch — the world’s most popular smartwatch. Also, the company finally released a lower cost HomePod mini smart speaker in November. And it sold out on its first day of sales.
Furthermore, last week I wrote about the revolutionary, ARM-based M1 processor that’s making headlines and has Windows PC makers worried. The M1 has the potential to kickstart a new wave of growth in Apple’s Mac sales — which were already worth more than $9 billion in the last quarter.
Sure, AAPL stock may have had trouble breaking through the $120 ceiling; But don’t expect that to last. All signs point to Apple leaving its $134.80 Sept. 1 high close in the dust before long.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.