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Apple: Quality Name To Own; AR/VR To Drive Growth

Jan. 03, 2022 12:33 AM ETApple Inc. (AAPL)30 Comments


  • Apple is one of our favorite ideas entering 2022. We expect investors to rotate into quality names in the face of increasing interest rates and tapering of the stimulus.
  • Apple is currently trading at 28.5x C2023 P/E versus the large-cap peer group of 34.2x. But Apple's earnings are GAAP, while much of large-cap peers' earnings are non-GAAP.
  • Apple revenue growth will accelerate in C2022 and beyond, driven by the launch of AR/VR products. AR/VR products should drive the growth of higher-priced iPhone and Mac offerings.
  • We expect Apple's share to hit $225 by the end of C2022 and $275 by the end of C2023, and $300 by the end of C2024.
  • Apple should remain one of the top holdings for any tech investor. We urge investors to accumulate shares when opportunities are presented.

Apple Store

Nikada/iStock Unreleased via Getty Images

We are bullish on Apple's (NASDAQ:AAPL) prospects as we enter 2022, and we recommend investors buy shares here. As many Wall Street analysts forecast, we expect Apple stock to rerate quickly as the company launches new AR/VR (Augmented

This article was written by

Tech Stock Pros profile picture
At Tech Stock Pros, we level the playing field for retail investors by providing the best-in-class research that is only accessible to institutional investors. We are the focal point where tech engineering and investment meet; that’s why we’ve launched our own Investing Group, Tech Contrarians. We started as engineers with years of experience at high-tech companies before earning an MBA. Since then, we’ve been top-ranked (Starmine Thomson Reuters, Factset, Institutional Investors) tech equity analysts at Wall Street bulges. We are objective in our assessment of the technologies involved and frequently take contrarian positions after a thorough investigation into the hype and conventional wisdom. We are your eyes into the market; we monitor and specialize in technology stocks from an industry-first approach to provide best-in-class investment research to retail investors.


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AAPL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (30)

What a FANTASTIC company!
Making many millionaires.
Tech Stock Pros profile picture
@shelan1 Yes. That is certainly true
When does apple report? Buy before or after?
Tech Stock Pros profile picture
@stackre I will buy now because the company is going to blow out the quarter.
Of all the companies listed on the large cap table Apple is likely the only one that can actually increase revenue and FCF more than 2x or 3x in 5 years. We will be throwing cash at apple for the next 10 years or more as they help build out the VR world everyone will jump into. Reality sucks and does not seem to be getting better anytime soon. Betting people will pay to escape seems like a sure bet!
Tech Stock Pros profile picture
@Mattcne Another important point is that they report on Gaap basis. There are very few companies in tech that report on gaap basis, making the stock much more cheaper than the alternatives. Plus the company has 1 billion installed base of phones and 700+ million subscriptions worldwide. More importantly after the company's inventory issues, fund managers have reduced their exposure to apple. This is an ideal time to enter the name.
Thanks for the article. I’ve been accumulating AAPL since the 90s, and now that I’m retired, I’m reluctantly selling to finance my retirement.

Your predicted share prices are very bold. From a self-interested perspective, I really, really, really hope that you are correct.
Tech Stock Pros profile picture
@NowRetired2021 Really appreciate it. The growth will accelerate. AR/VR will drive the upgrade cycle. I don't think the street estimates reflect the impending growth.
@Tech Stock Pros I feel the recent rally shows the street is beginning to. I am enthusiastic about VR/AR but we have a long way to go to truly understand the impact of this new platform on all of us and Apple specifically.
Tech Stock Pros profile picture
@astout1000 You are certainly right on the impact on all of us. I think it will be gaming first. The gaming use case will be enough to rally the stock first. Then other use cases will emerge. I think we are on a cusp of another revolution. It will be interesting to watch.
JosephCortes profile picture
AAPL 4ever
@Tech Stock Pros - I am Long $AAPL, also Long this handle.
A very good article. Be careful though, as the Negative Nellies will want to 86 you from SA if you write another one.
Jeff_Canada profile picture
Sound article and good advice for new investors. As a long term investor myself, I still continue to hold a large position and look at Apple as my retirement strategy 10 years from now. Apple continues to be a solid safe and profitable investment. Long Apple.
Tech Stock Pros profile picture
@Jeff_Canada excellent. Congrats on your success
So what is a good entry price?
Will it go up before the 25 Jan ?
Tech Stock Pros profile picture
@stackre i will buy now. Definitely before earnings
Tech Stock Pros profile picture
@stackre you are welcome. Consider following my work
Are u gonna wear goggles? I’m not going to.
@LrngToFly When they reveal that they have teamed with or purchased MVIS, it will be “glasses” and not “goggles”.
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