Apple (AAPL 2.57%) stock is in a funk. Concerned by the company's late arrival to the artificial intelligence (AI) game (and its consequent need to iPhone Google for help), share prices of the iEverything stock are down about 12% since the start of 2024.
And that's not all. Investors also seem worried Apple has lost its mojo in China. Last summer, the Chinese Communist Party banned the use of Apple iPhones in government offices, giving Chinese consumers a none-too-subtle cue that Apple is persona non grata in the Middle Kingdom.
Wedbush Securities analyst Daniel Ives called this "one of the more difficult China demand environments seen the last five years," in a note covered on TheFly.com on Tuesday. And yet, Ives suspects Apple will come out on top -- and urges investors not to miss the "forest for the trees."
Apple's still a buy, insists Ives, and with a $250 target price, he's predicting the stock will gain 47% over the next 52 weeks.
Is Apple stock still a buy?
Is Ives right? The analyst argues Apple has a "golden installed base" of 1.5 billion iPhones in use around the world -- a big fanbase of potential buyers of its upcoming iPhone 16, and a bigger market for Apple services on all those devices. And yet, there's another way of looking at this.
What if those 1.5 billion users are already happy with their iPhones? What if a lot of them decline to upgrade to iPhone 16, and some of them even decide to switch to Android?
With nearly 1-in-4 persons around the world already owning an iPhone, the simple fact that Apple has already penetrated so much of the mobile phone market makes it that much harder for the company to keep growing quickly. Indeed, long-term forecasts see Apple's earnings growing barely 10% a year over the next five years. That's not particularly fast for a supposed growth stock costing a rich 26 times earnings, like Apple.
Ives may think this stock has another 47% of stock appreciation in it. But I have my doubts.
