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Analyst sees 'bull case' of $400 for Apple, citing 5g 'super cycle'

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Key Points
  • Longtime technology analyst Dan Ives has a new "bull case" of $400 for Apple's stock by year-end, a nearly 35% climb from here.
  • The Wedbush analyst said 2019 was just the beginning phase of a "transformational 5G super cycle," while the demand for iPhone 11 has been stronger than expected.
  • Ives is the biggest Apple bull on Wall Street with the highest price target of $350 among 44 analysts covering the stock, according to FactSet.
Apple CEO Tim Cook gestures after opening the newly renovated Apple Store at Fifth Avenue on September 20, 2019 in New York City.
Kena Betancur | AFP | Getty Images

Is Apple due for a pullback after its nearly 90% surge last year? Longtime technology analyst Dan Ives doesn't believe so.

In fact, the Wedbush analyst said 2019 was just the beginning phase of a "transformational 5G super cycle," while the demand for iPhone 11 has been stronger than expected. Ives now sees a "bull case" of $400 for Apple's stock by year-end, a nearly 35% climb from here.

"IPhone 11 strength appears to have legs both in the US and China as installed base demand continues to look healthy into the March/June quarters with the drumroll into the highly anticipated 5G upgrade cycle in September," Ives said.

Shares of Apple rallied a whopping 86% in 2019, posting their best year since 2009 and single-handedly contributing more than 8% of the S&P 500's total returns in the year. Ives is the biggest Apple bull on Wall Street with the highest price target of $350 among 44 analysts covering the stock, according to FactSet.

Of an estimate of 925 million iPhones worldwide, roughly 350 million of them are in the "window of an upgrade opportunity" into 5G and new models, he said.

"We believe Cupertino has a unique opportunity to capture this super cycle opportunity with a major 5G cycle on the horizon," Ives said. "There are at least 5 iPhone versions that will launch in 2020 with the main event the 5G launch in September that could include a number of versions/models."

Wedbush's recent checks revealed the iPhone 11 units for the holiday season was "robust" and there was an "eye popping" AirPods performance, Ives said.

The analyst also predicted Apple's services business to reach $500 billion to $650 billion, becoming a key revenue stream for the tech giant.

Shares of Apple rose 0.8% on Monday to $299.80.