Gene Munster Dismisses Goldman's Apple Downgrade, Says Cupertino Has Long-Term Earnings Power

Goldman Sachs downgraded Apple Inc. AAPL to Sell, and Gene Munster of Loup Ventures said the firm is "tone-deaf" and missing out on the bigger picture.

Munster Says Cook Is Hinting At 'Ugly' Earnings 

Apple CEO Tim Cook said during an employee meeting this week he remains ultra-focused on long-term themes, especially those in health and wellness and 5G technology, Munster said Friday on CNBC's "Squawk Box."

Reading between the lines, this may suggest that near-term earnings reports are likely to be "ugly," especially as Apple continues to pay for employees at retail stores that are not operational, he said. 

Apple Can Reach $575, Munster Says

Cook is "laying the groundwork" for Apple to grow over the next five, 10 or even 15 years, the tech venture capitalist said. 

Apple is making the "right decision now" to invest in its business, and this helps make the case for shares to rise to $575, Munster said, adding that this estimate is based on the premise of 15% earnings growth over four years and a multiple of 25 times.

Munster Says Apple's Investments Will Pay Off 

Companies that are making the right decision today to invest in themselves will "outperform the most," Munster said.

Compared to fellow big-tech companies like Amazon.com, Inc. AMZN, Apple boasts earnings power that is "significantly greater longer-term," he said. 

Similarly, Facebook, Inc. FB is not "changing the world at the same velocity" compared to Apple or Amazon, Munster said.

Apple shares were down 1.73% at $281.72 ahead of the close Friday. 

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Photo courtesy of Apple.