After mixed updates from the tech titans so far in this earnings season, it falls to iPhone maker Apple Inc (NASDAQ:AAPL) to underline the reasons why they are valued so highly.
The first-quarter update comes just weeks after it (briefly) became the first company to reach a US$3tln valuation.
First-quarter trading has historically been strong for the tech giant, often boosted by sales in the festive period of Thanksgiving and Christmas, which would have been further helped by the new Apple iPhone13 and new Apple Mac products.
Even so, the iPhone maker was cautious in setting expectations at the time of its previous results though commentators are more optimistic.
Consensus forecasts for the first quarter are for sales to rise by 6% like-for-like to US$118bn, with EPS expected to come in at US$1.89 a share.
Stockbroker Wedbush said iPhone 13 sales were robust globally during a strong festive season, forecasting that Apple sold north of 40mln smartphones, a record number for the Cupertino-based company.
This performance was despite an unprecedented chip shortage out of Asia’s supply chain, analyst Daniel Ives added.
In China alone, there were approximately 15mln iPhone 13 upgrades in the last quarter, according to Wedbush estimates.
Ives said he felt the risk/reward for the shares “is very favourable” at current prices for a company he called a “safety blanket tech stalwart”.
He does not expect supply chain woes to halt Apple’s growth in 2022.
“While the supply chains issues have curtailed some growth for Apple, we believe the pent-up demand… is still being underestimated by investors,” Ives said.
Wedbush reiterated its ‘outperform’ rating for the US$2.65tn company, with a US$200 price target.