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Apple's services business will double in 3 years, Credit Suisse predicts

  • Credit Suisse believes the market "underestimates" the profitability and value of Apple's services business.
  • The firm cites how the company has 650 million users with 1.1 billion hardware devices.
An advertisement for Apple Music on the streets of New York.
Getty Images
An advertisement for Apple Music on the streets of New York.

Investors should buy Apple shares because the market will soon start to recognize the value of the company's services business, according to Credit Suisse, which reiterated its outperform rating on the tech giant.

"We have updated our proprietary model and continue to believe that the market underestimates the gross profit contribution from services, but more importantly, that it underappreciates its growth potential and the annuity-type business it drives in terms of retention and replacement across the business," analyst Kulbinder Garcha wrote in a note to clients Tuesday.