How Tesla And The Concept Of 'Mixed Reality' Can Lead To Apple's Growth

The darling of Wall Street with $216 billion in cash is having a rough day. Apple Inc. AAPL recently traded down nearly 6 percent at $94.25 following its Q1 earnings report on Tuesday. The company issued a solid EPS beat, but fell just short on revenue. Apple's key products - iPhone, iPad, Mac - all missed estimates.

To provide more color on the report, Piper Jaffray analyst Gene Munster joined Benzinga's PreMarket Prep on Wednesday morning.

"There's some measurable and meaningful catalysts [coming]," Munster said. "[Apple remains a] strong fundamental story." The analyst said macro concerns for the June quarter has "spooked" investors, hence the selloff in its stock.

Related Link: Gene Munster: Apple Watch 'Struggling,' But Catalysts Still Coming For Shareholders

Tesla M&A

In terms of Apple's $126 billion in cash, Munster said the company can tool for supply chain. He mentioned auto products long-term are "high-level" uses of the cash balance.

The Piper analyst has repeatedly said Apple should acquire Tesla Motors Inc TSLA. He commented further on that potential, saying the battery patent is key. Two things Tesla has that are huge are "patents and people." However, Tesla CEO Elon Musk's conviction makes it "unlikely" he'll sell.

Apple may get its hands on Tesla's R&D team, as R&D spending is rising rapidly. "Typically, Apple's R&D increase track revenue...there's been a separation there [of late]," Munster said.

Virtual Reality

Munster said virtual reality is the "forerunner" to a bigger theme in future: "mixed reality." Essentially, Apple needs a plan.

"The screen, as you know, it goes away and we start to have wearables" to give users the information quickly. Due to Apple's size in the screen business, it will be "critical" that it makes progress.

When thinking about Apple's next decade, the concept of "mixed reality" is an area that will see "progressively more M&A," but likely acquisitions of smaller companies.

Catch the rest of PreMarket Prep's interview with Gene Munster in the clip below, and listen to the show live every morning from 8-9:30 a.m. EST here.