CNBC Stock Blog

Apple Stock Is Still a 'Strong Buy'—Here's Why: Pro

Does Slow & Steady Win the Stock Race?

Investors have been taking money out of Apple and putting it in other big technology names like Google but Scott Kessler, head of technology equity research at S&P Capital IQ, said he still thinks Apple is a "strong buy."

S&P Capital IQ upgraded Apple stock in November ahead of the holiday shopping season.

"We thought that was being opportunistic," he said. "We were definitely early, but we like the stock here. We think the sentiment is way too negative. And we frankly think that they're going to do something from a capital allocation perspective sooner rather than later."

Of course, he's not dissing Google.

"If people want exposure to smartphones, they want exposure to tablets, Google is a pretty good way to play that, we think," Kessler told CNBC's "Squawk on the Street". But, he thinks the company still faces a lot of speed bumps, including slower growth for its core search business.

"Look, everyone was recommending and buying into Apple in September when it peaked at over $700," he said.

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"Now it seems like it's just trying to find a floor. With Google, it doesn't seem like the enthusiasm is quite as great because people are taking all the capital they had in Apple and allocating it to a number of other comparable names like Google. Sure it could happen. Sentiment can change very quickly — that's one lesson we learned," Kessler said.

Apple shares are currently trading near 52-week lows and Google shares have been climbing since November, hitting fresh all-time highs on Tuesday and again on Wednesday.

Kessler has a "hold" rating and an $825 price target on Google stock, which is about 4 percent higher than its price on Wednesday. His "strong buy" rating and $600 price target reflects a more bullish view on Apple shares, which are around $450.

—By's Katie Little; Follow on Twitter @Katie_Little

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Scott Kessler does not own shares of Apple or Google.