Apple shares have fallen drastically in the past six months amid innovation concerns and competition worries. Wu noted that the recent supply chain rumors are likely due to weaker demand cause by an inventory drawdown ahead of the iPhone refresh later this year, and that's affecting investor sentiment.
surpassing $700 a share
in September, Apple is off nearly 40%.
That doesn't mean all is lost for Apple, however. Apple's $137 billion in cash has
come under attack
, with David Einhorn and others asking for Apple to return some of it to shareholders. Apple has noted in the past it's in active discussions about returning more cash to shareholders, something Milunovich noted is a positive.
There's also the
for a deal with
, as "the increase in China Mobile's capex to $31bn this year in support of a 4G network that suggests coming support for the iPhone," Milunovich noted.
Lastly, investor sentiment is so bearish on the stock, and with so many analysts cutting estimates left and right it seems as if all hope is lost for Apple. Not so, said Wu.
"With 2 weeks left, we believe AAPL will likely hit the lower end of its guidance. The good news is this is better than most expecting a miss," Wu said.
Apple shares are higher in early Friday trade, up 1.73% to $439.99.
Written by Chris Ciaccia in New York