UBS analyst Steven Milunovich shared his views on Apple in an interview Tuesday on CNBC's "Squawk on the Street."
On Apple's run in the market: "The December quarter was pretty solid. The guidance wasn't as poor as people expected. The supply chain is starting to think about ramping up for the new iPhone 8. So I think investor confidence is just increasing. Now, we're going to see a strong iPhone 8 cycle, and then of course, you have Warren Buffett buying in, which suggests that maybe there are more moats around Apple than investors have given it credit for."
On the cyclical nature of Apple's stock: "Increasingly, we're thinking you could have a two-year cycle here, particularly depending upon supply of OLED. And investors want to see more consistency. The company has been emphasizing services, but really we should go up a level to look at the installed base of iPhones, which is still growing close to 20 percent, and the retention rate, which is 90 percent. As long as those things are in place, you've got a fairly consistent story here, and then hopefully, longer-term optionality with some major new products coming."
On Apple in China: "China is critical to Apple. It used to be two-thirds of growth and now it's actually a drag. And how the iPhone 8 does next year depends to a large degree on how China does. We do think the issues that Apple has had in China are more cyclical than secular."
Milunovich is the managing director at UBS, known for his coverage of technology stocks and detailed analysis of Apple.
He also discusses:
- Tim Cook
- Augmented reality
- Trade war in China
To watch the broadcast interview in its entirety, you must be a CNBC PRO subscriber.