Apple Inc.: Analyst Issues Grim 10-year Call on AAPL Stock

AAPL Stock
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Apple Inc. (NASDAQ:AAPL) got some bad news from one analyst who believes that the tech giant’s AAPL stock is in store for a “decade-long malaise.”

AAPL stock has had an up-and-down month, falling 4.3% overall but rising by 5.5% in the last five days. But, for this analyst, it’s only going to go downhill from here. (Source: “Apple faces a ‘decade-long malaise,’ says analyst,CNBC, November 21, 2016.)

“We believe Apple lacks the courage to lead the next generation of innovation (AI, cloud-based services, messaging); instead will become more reliant than ever on the iPhone,” Oppenheimer analyst Andrew Uerkwitz wrote. “Over the next decade we believe the stock will generally underperform the market.

With more competition and slowing advances in products like phones, computers and tablets, Uerkwitz wrote in a research note that he expects fewer customers will be willing to pay higher prices or upgrade their devices at the same rate over the next decade.

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As the iPhone approaches its 10th anniversary next year, “cracks are showing in the Apple wall of invulnerability,” Uerkwitz wrote.

(Source: Ibid)

This is quite the dire prediction for what is seen by many as an attractive long-term stock. One analyst later in the piece even went as far as to call the prediction “clickbait.”

But, considering the numbers, let’s examine AAPL stock, shall we? The share value is down by about 6.5% from a year ago, although a year ago saw AAPL stock edge around its all-time high value. Couple this with Apple’s otherwise dominant market share in the smartphone sector and reputation for innovation, and there’s a lot to like about the tech giant.

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On the other hand, analysts predict that the end of the smartphone craze (which will peak as the pool of potential first-time buyers shrinks with the global expansion of smartphones) will hurt AAPL stock. How much? That, of course, depends on who you ask, and also if you believe that Apple simply won’t be able to follow the tail-end of the smartphone boom with another equally popular product.

While many analysts agree that finding a product to rival the “iPhone” will be difficult for Apple, many are not yet as convinced as Andrew Uerkwitz is to rule out AAPL stock just yet.