The company AAPL could see strong iPhone demand through 2022, and some are worried that demand for PCs and Macs will cool after a pandemic-driven boom, but expectations have already been tempered, according to Piper Sandler analyst Harsh Kumar.
He recommended Friday that technology investors look at Apple as a place to hide in the current environment because of the company's prospects for the year ahead and the volatile tech backdrop. When it comes to Apple's story, nothing matters like the iPhone, he wrote, adding that this part of the business seems well positioned for 2022. The U.S. carriers continue to build out their 5 G networks and offer subsidies on new phones, which could help drive demand. India has the potential to play an increasing role in the years to come, and China is a source of strength.
Kumar sees an opportunity for the company to eventually notch a $4 trillion valuation by becoming a bigger player in the world of healthcare and automobiles, looking more broadly at Apple's narrative. Apple has knocked on the door of a $3 trillion market value, with shares having reached the required threshold in intraday trading earlier in January but failing to close at that level. He wrote that the Apple Watch was continuing to add more and more features in healthcare, with the goal of eventually offering a blood sugar monitoring system. Apple is interested in developing a car, according to a report. Such a project makes sense, in Kumar's view, given that the car represents a hardware platform on which Apple can sell its services. Kumar bumped up his price target on Apple's shares to $200 from $175, while keeping an overweight rating.
Shares of Apple are off 0.5% in Friday afternoon trading. The Dow Jones Industrial Average DJIA has gained just 2% over the past three months, and they have advanced 19% over the past three months.