Apple Delivered Much Better-Than-Feared 'Jalen-Brunson-Like' Quarter, Says Bullish Analyst: Why Betting Against Cupertino Is A 'Wrong Move'

Zinger Key Points
  • The star of the show was June guidance calling for low single digit growth vs. expectations for a decline, says Daniel Ives.
  • The historical $110 billion buyback Apple announced reflects the massive cash-flow generation coming out of Apple, according to him.

Apple, Inc.’s AAPL second-quarter earnings announcement catalyzed a strong upward move in the stock in premarket on Friday. A bullish analyst offered his take on the tech giant’s quarterly results.

Impressive Quarter: Wedbush analyst Daniel Ives was visibly impressed. While the Street was bracing for a brutal March quarter, Tim Cook‘s iPhone giant delivered a “much better than feared Jalen Brunson-like quarter,” he said.

Ives noted that the headline results beat Street estimates and iPhone sales were generally in line. “The star of the show was June guidance calling for low single-digit growth vs. the Street’s whisper numbers looking for a decline.”

The guidance implied that iPhone demand could be starting to slowly turn the corner in China and the Services segment remained robust, the analyst said. He now thinks the all-important China region would start showing signs of a turnaround in the June quarter and return to growth in the September quarter after delivering a “less bad” March quarter.

See Also: Everything You Need You Know About Apple Stock

Historical Buyback: Ives said the historical $110 billion buyback Apple announced reflects the massive cash-flow generation coming out of Apple. “The capital allocation strategy remains music to the ears of investors in this tech stalwart,” he said.

Drumroll Moment: The imminent unveiling of Apple’s long-awaited AI strategy to its “golden” installed base and developer community at the June annual World Wide Developer Conference is the drumroll moment, Ives said. This will kickstart an “AI-driven super-cycle starting with iPhone 16 this Fall,” the analyst said.

The AI strategy at Apple will comprise an “AI App Store that will the foundational starting point for developers and AI apps over the coming years tapping into the 2.2 billion iOS devices worldwide along with an iPhone 16 model that will break new ground in AI and begin this next supercycle at Apple,” he said.

“Our view is betting against Cook and Cupertino into an AI-driven supercycle and $110 billion buyback is the wrong move for investors as the renaissance of growth returns back to the Apple story.”

Apple, the analyst said, remained one of Wedbush’s top tech picks for the year, with the quarter reinforcing the firm’s thesis that the worst is now behind Apple in China.

Ives has an Outperform rating and a $250 price target for the stock.

In premarket trading, Apple rose 6.51% to $184.29, according to Benzinga Pro data.

Read Next: Elon Musk Wowed By Apple’s Biggest Stock Buyback — Will Tesla Follow Suit Or Remain Stuck In ‘Category 5’ Storm?

Photo courtesy: Shutterstock

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Posted In: Analyst ColorEarningsEquitiesLong IdeasNewsReiterationTop StoriesAnalyst RatingsTechTrading IdeasDaniel IvesExpert IdeasStories That MatterWedbush
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