Wedbush Sees Apple Strength in iPhone and Services for Rest of 2022

30 JUNE 2022 - While Apple earnings for the June-quarter may be a bummer, Wedbush analyst Daniel Ives reminds investors that the September and December quarters are coming. Apple 3.0 ran part of a note Ives wrote on Tuesday. On the June-quarter, COVID lockdowns and other turbulence led Apple to warn of a negative impact to revenue of between $4 billion and $8 billion. Even so, Ives & Co. think iPhone did slightly better than anticipated last quarter. But last quarter is so last quarter. According to the analyst:

…the Street is well aware of weakness [for the June] quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall.

On the next Jesus phone, Ives thinks Apple is looking at builds that are even with last year’s iPhone 13 builds - perhaps a little higher. That, he says, “speaks to Apple’s confidence that pent up demand for this next release remain healthy despite the jittery macro.”

What’s funny is, while his note says “all eyes” are on iPhone 14 production and demand, he’s cast his eyes elsewhere: Apple Services. Quoting his note again:

With Apple’s services business set to be roughly $80 billion of annual revenues this year and set to grow at a steady “double digit” clip into 2023, we believe this key revenue stream remains at the epicenter of Apple’s multiple and growth story during this market storm.

Mr. Ives has an “Outperform” rating on Apple shares. His price target on the shares is $200.