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Forget iPhones, Apple Investors Are Really Focused On This

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Apple Inc. (NASDAQ: AAPL) is in the midst of a "seminal" week, FBR Capital analyst Daniel Ives recently told CNBC. Ives, who in the past has called for Apple to buy GoPro Inc (NASDAQ: GPRO), still holds a Buy rating on the stock with a $150 price target.

This coming quarter is a "prove me" quarter, Ives added. While the company is the "gold standard" in several markets -- including smartphones, watches and laptops -- many investors are ultimately focused on what Apple does with its massive cash balance.

"A lot of investors -- really the Street -- is focused on: Does Cook use some of that $200 billion...?" Ives mentioned a strengthened buyback as a possibility, and also the possibility of strategic M&A, like a purchase of Time Warner Inc (NYSE: TWX) assets or an outright buy of Netflix, Inc. (NASDAQ: NFLX).

When it comes down to it, though: Instilling confidence this quarter will restore it in investors for the rest of 2016, he said. If the iPhone 7 build is less than what the market is expecting, Alphabet Inc Class C (NASDAQ: GOOG) could overtake the company as the largest in the world by market capitalization, Ives concluded.

A Miss Doesn't Mean Much In Long-Run

Tim Lesko of Granite Investment Advisors had a slightly different take. "If this is a weak quarter for iPhone sales, certainly that happens," he told the outlet, but added that in the long-run, a miss might not mean a lot.

With the iPhone 7 coming and Apple's cash balance, Lesko said Apple still has upside. 

"At a time when PC sales continue to decline, Apple continues to gain market share...at a time when other watches haven't really done anything, Apple Watch has the leading market share in smart watches."

Apple shares rest near the triple-digit mark on Monday's trading as investors inch closer to the company's earnings report.

Latest Ratings for AAPL

DateFirmActionFromTo
Mar 2017NeedhamDowngradesStrong BuyBuy
Mar 2017NomuraMaintainsBuy
Mar 2017BernsteinMaintainsOutperformOutperform

View More Analyst Ratings for AAPL
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