Apple's Core Fans Keeping the Faith

Apple Computer offered a disappointing earnings outlook on Wednesday, but don't expect investors to throw in the towel quite yet.

Wall Street seemed willing to excuse the company's guidance -- which was significantly below the Street's earnings and revenue targets for the current quarter -- as simply an example of management being conservative. In recent quarters, the iPod maker's results have consistently topped the company's own outlook and Street expectations, most notably in its just-completed holiday period, when Apple's results exceeded sales guidance by more than $1 billion.

"I'm taking a five-year view," says one portfolio manager at a major financial services firm who is long Apple. "Each miss to me looks like an opportunity [to buy the stock]," the portfolio manager adds.

Not that the market didn't seem to have some reservations about Apple on Thursday. In recent trading, the company's stock was down $2.32, or 2.8%, to $80.17.

But that represented a rebound from the after-hours session on Wednesday night, when the stock was down as much as 7% from the close of regular trading that day.

And the betting by many on the Street was the stock would rebound further in coming weeks and months. The portfolio manager, for instance, predicted Apple's stock would hit $100 a share by the end of this year.

In their reports today, sell-side analysts generally reiterated their optimistic ratings on Apple. Piper Jaffray analyst Gene Munster's reaction, for instance, was typical:

"We would be buyers of AAPL shares on the pullback today as we believe March-quarter guidance will prove to be conservative given that Apple's strategic plan, competitive position, new product roadmap and market opportunity remain unchanged," Munster wrote, reiterating his outperform rating on Apple shares and his $103 year-end price target. Piper Jaffray has not done recent investment banking business with Apple.