Top Stories
Top Stories

Buy Apple on the App Store's booming growth and profitability, top analyst says

Chinese customers are experiencing and choosing Apple's products in an Apple store beside West lake in Hangzhou, which is the biggest Apple store in Asia.
Zhang Peng | LightRocket | Getty Images

Investors should buy Apple shares on the attractive sales growth potential of the company's services business in the coming years, according to Macquarie Capital, which reiterated its outperform rating.

"Going into the quarter AND for long term, we continue to believe that the software and services at Apple are the most underappreciated aspect of the Apple story, particularly the App Store," analyst Ben Schachter wrote in a note to clients Tuesday.

"In fact, we expect management itself to highlight services and the App Store growth to investors. We are continuing to be bulls on the AAPL services opportunity."

Apple is scheduled to announce fiscal fourth-quarter financial results Tuesday after the market close.

Schachter's picks have a 22 percent one-year average return and an 83 percent success rate for a profit, according to analyst ranking service TipRanks. That places him in the top 1 percent of all Wall Street analysts covering any industry.