Long-term tech stock investors should watch amid market volatility
Mark Mahaney, RBC Capital Markets, and Mark Shmulik, Bernstein, join ‘Squawk Alley’ to discuss what they’re watching in tech stocks amid the coronavirus outbreak.
Wedbush Securities analyst Dan Ives said in note on Monday that investors should “focus on Apple during this sell-off.”
Shares of Apple were down roughly 5.3 percent early Monday morning to $273 per share, down from a 52-week high of $327.85 as the markets continue to crater. But, Ives says investors should “focus on the tech winners for the next 5-10 years including Apple front and center.”
Ives said current supply chain issues caused by coronavirus is a “shock event that will be short lived” and that iPhone demand will begin to normalize in the second half of the year.
″While the supply chain issues and China demand shift are near-term fundamental headwinds, our primary focus is that the first part of this massive upgrade opportunity on the horizon with 5G leading the way should still be in the 215 million to 220 million unit range looking out to FY21,” Ive said.
“At the end of the day, while the supply chain and demand will move around over the coming quarters, we believe Apple based on shifting timing could potentially ship north of 231 million iPhones in FY21 in an upside scenario, which will break its previous record set in FY15.”
The note suggests that about 60 million – 70 million iPhone users in China are ready for an upgrade and that Apple could “get back on pace to convert at least half of these customers starting in the June quarter.”
Apple typically unveils its new iPhones in September and is expected to include new 5G chips this year, which will eventually provide iPhone owners with faster data speeds as carriers continue to roll out new 5G networks. Ives said Wedbush maintains its outperform rating for Apple.
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