Shares of Apple Inc. rose Wednesday, to buck the broader stock market’s selloff, after longtime bullish analyst Dan Ives at Wedbush raised his price target, citing signs that demand for iPhones in China has been growing.
The technology behemoth’s stock advanced 0.5% in afternoon trading, even as the Dow Jones Industrial Average dropped 195 points, or 0.6%, with 22 of 30 components losing ground. The technology-friendly Nasdaq Composite Index slipped 0.2%.
Ives said iPhone supply was steady in January and February, in contrast to the supply-constrained December quarter that resulted from issues related to China’s zero-COVID policies. And early indications in March suggest conditions continue to improve.
“Our Asia iPhone supply chain checks this week have been incrementally more positive, with a modest uptick in demand coming out of China for Apple with a clear demand rebound happening in this key region post December, despite the uncertain macro backdrop,” Ives wrote in a note to clients.
In Apple’s fiscal first quarter, which ended in December, iPhone revenue of $65.78 billion made up 56.1% of total revenue, and sales generated in China of $23.91 billion made up 20.4% of total revenue.
Ives said Apple is gaining market share in China and demand in the U.S. and Europe is holding up well. He estimates that about a quarter of current iPhone users have not upgraded their iPhones in more than four years, and he believes the new iPhone users added to Apple’s ecosystem over the past year will lead to a reacceleration of the company’s services business in the coming quarters.
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Ives reiterated the outperform rating he’s had on Apple for at least the past three years. He raised his stock-price target to $190 from $180, with the new target implying about 25% upside from current levels.
The new price target ties Ives with Evercore ISI’s Amit Daryanani for the second-highest target for Apple’s stock, according to FactSet data. The highest target on Wall Street is $195, which three analysts — Jefferies’ Kyle McNealy, Piper Sandler’s Harsh Kuman and TD Cowen’s Krish Sankar — have on the stock.
Of the 40 analysts surveyed by FactSet who cover Apple, 31 are bullish, seven are neutral and 2 are bearish. The average price target is $169.16.
Apple’s stock has advanced 6.8% over the past three months, while the Dow Jones Industrial Average has slipped 3.3% and the technology-friendly Nasdaq Composite has gained 3.9%.