What happened
Shares of tech giant Apple (AAPL 0.51%) were off to the races Wednesday afternoon, up 2% as of 1:40 p.m. ET, most likely thanks to an upbeat note from investment bank Wedbush this morning.
Image source: Getty Images.
So what
In its note today, Wedbush cited "stellar iPhone 13 demand globally" as the basis for its optimism on the stock. iPhone 13 sales are strong in the U.S., and particularly strong in China, said Marketwatch, with Apple picking up another 3% of market share in the latter nation.
What's more, Wedbush said it believes Apple is in an "elongated product cycle" and that the iPhone 13's success will turn into "the drumroll to iPhone 14 this Fall" (keeping today's rally going all year long). And that's on top of a prediction that the company will sell 30 million new 5G-capable iPhone SEs this year.
For what it's worth, investment bank J.P. Morgan seems to mostly agree. In a separate note, it points to "incremental datapoints [that] support our positive outlook for iPhone 13 demand into [calendar year 2022]," to back up its own overweight rating and $210 price target on Apple.
Now what
And 2022 could be only the start of the good news.
Peering deeper than usual into its crystal ball (Wall Street analysts usually only forecast 12 months out), Wedbush predicts that Apple's "monster" growth cycle will continue over the next 12 to 18 months. Thus, this rally could potentially extend all the way into late 2023, a likelihood that Wedbush does not believe has yet been "baked into shares at current levels."
I'm inclined to agree. At 25.6 times earnings, Apple stock doesn't cost much more than the average company in the S&P 500, which costs 25.5 times earnings. Apple, however, is anything but an average company. Its stock price probably deserves to go higher.
