Apple will jump 35% on 5G ‘super cycle’ in raised bull-case scenario, according to Wedbush (AAPL)

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  • As Apple circles in on a $2 trillion valuation, don’t expect the gains to stop anytime soon, according to Wedbush Securities analyst Daniel Ives.
  • In a note published on Sunday, Ives raised his Apple 12-month price target to $515, and its bullish scenario price target to $600, representing upside potential of 16% and 35% from Friday’s close, respectively.
  • The raise in Apple’s price target is predicated on a 5G “super cycle” that, according to Ives, is right around the corner.
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Apple is on the verge of becoming the first public company to reach a $2 trillion valuation, and if or when it does, don’t expect the gains to stop, according to Wedbush Securities analyst Daniel Ives.

In a note published on Sunday, Ives detailed that a 5G “super cycle” is right around the corner, with Apple in the midst of a “once in a decade” opportunity to capitalize on a massive upgrade cycle for its current iPhone user base.

Apple is expected to launch the iPhone 12 in October, and according to Asia supply chain checks conducted by Wedbush, there has been a “discernible uptick in forecasts for iPhone 12” over the past week. 

The research firm now expects only 5G models to be released this fall, with a cheaper 4G iPhone to be released in early 2021. And how important is the iPhone 12 to Apple? According to Ives, the new phone will represent “the most significant product cycle for Cook & Co. since iPhone 6 in 2014.”

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Ives estimates that roughly 350 million of Apple’s near 1 billion worldwide iPhone install base is due for an upgrade, and a new 5G iPhone could spur a lot of consumers to go through with an upgrade over the next 12 to 18 months.

“We still believe many on [Wall] Street are underestimating the massive pent-up demand around this super cycle for Apple, which remains the opportunity for the bulls,” said Ives.

Ives raised his Apple 12-month price target to $515 from $475, representing upside potential of 16% from Friday’s close. Additionally, Ives set a bull-case scenario price target of $600, which represents upside potential of 35% from Friday’s close.

The price targets are derived from a sum-of-the-parts valuation, with the services business commanding a valuation of $700 billion to $750 billion, according to Wedbush.

Ives also highlighted the potential for Apple’s wearables business, which has seen AirPod unit sales hit 65 million in 2019, and is estimated to hit 90 million unit sales this year, according to estimates from Wedbush.

Apple shares jumped 2% to $453.28 in Monday morning trades. The company would need to hit $467.77 to reach a $2 trillion valuation.

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