Apple (AAPL -0.35%) share prices are down about 5% on the year so far, and Wedbush analyst Dan Ives sees the drop as a buying opportunity.
The analyst recently maintained his buy rating on the stock and reiterated a $250 near-term price target. That target represents a 35% upside from the current share price of $183. His optimism reflects sales expectations for Apple's new Vision Pro headset, which the company describes in press releases as "a revolutionary spatial computer that seamlessly blends digital content with the physical world."
Analysts expect the Vision Pro to hit 1 million unit sales in 2025
Analysts at Wedbush originally set the high price target last year on the expectation of strong sales of the iPhone 15. Sure enough, Apple reported better-than-expected revenue of $119 billion in the December-ending quarter, driven by iPhone.
Ives now sees Apple's Vision Pro headset -- the company's first major computing product since the Apple Watch -- as a growth catalyst that could provide upside to Apple's long-term earnings growth. His sales forecast is 600,000 units in 2024 with 1 million unit sales in 2025.
Bank of America analyst Wamsi Mohan has the same forecast for 2025, and he raised his projection to 4 million units for 2026.
Is Apple stock a buy?
Apple stock is not cheap, trading at a high forward price-to-earnings ratio of 28, and the Vision Pro may take a while to catch on with Apple's customers, especially given its high retail price tag of $3,499.
However, Apple has a long history of delivering new products that people eventually can't live without but didn't think they wanted in the first place. This is a highly profitable business, with nearly $100 billion in annual free cash flow, and it got to this point by making calculated bets on what it thinks customers are going to love. I wouldn't bet against it over the long term.
