What happened

Joining the rest of the stock market in bouncing, Apple (NASDAQ:AAPL) shares defied gravity today and levitated a solid 3% through 1:25 p.m. EDT.

Helping the tech giant recover from yesterday's selling was a positive analyst note from investment banker UBS.

Red apples floating in midair

Image source: Getty Images.

So what

One day after analysts at Deutsche Bank said that they see "strong momentum across all of [Apple's] businesses," and investment bank Bernstein predicted a modest beat by Apple in its upcoming third fiscal quarter of 2021, UBS chimed in today with a reiterated buy rating of its own.

"Based on strength in iPhones in what is typically a seasonally slower quarter and better Mac sales despite supply chain headwinds," StreetInsider.com reported, UBS said it was raising its third-quarter 2021 revenue and EPS estimates to $74.7 billion and $1.01, respectively, from $71.3 billion and $0.95.

Now what

So, are $74.7 billion in sales and $1.01 EPS good or bad?

For that, you need to know the context. Wall Street analysts on average predict that Apple's sales grew 22% year over year in the third quarter, to $72.9 billion, and that Apple earned about $1 per share -- 56% better than last year. Relative to those predictions, UBS is only about 1% ahead of the Street on its prediction of Apple's earnings. (Indeed, UBS admits as much.)

More significantly, though, UBS seems to think that Apple beat Street projections by 5 full percentage points on sales. And if Apple can overcome supply chain issues to acquire all the computer parts it needs, to sell all the PCs, iPads, and iPhones its customers want, UBS says further upside is possible.  

So it's no wonder investors were happy to hear the UBS prognosis.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.