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Apple Stock: What Wall Street Is Saying As WWDC Unfolds

As WWDC 2021 continues, the Apple Maven reviews Wall Street’s key takeaways from the keynote address and discusses the implications for Apple stock.

Apple’s WWDC 2021 continues through the end of this week. For Apple stock (AAPL) investors, probably the most important two hours of the event took place on June 7, during a keynote address that the Apple Maven considered to be largely uneventful.

Below are some key takeaways offered by Wall Street analyst during WWDC week, along with the Apple Maven’s own opinion on their insights and the implications for the stock.

Figure 1: Apple's WWDC21.

Figure 1: Apple's WWDC21.

Read more from the Apple Maven: 3 Key Takeaways From WWDC 2021

Bulls see the long-term benefits

Here is an example of how consensus can be way off the mark. Nearly every Wall Street analyst expected to see Apple unveil at least one hardware update during WWDC: either a new set of MacBook Pro laptops, at best, or simply details on the next generation of M1 chips. But none of it happened.

Mega-bull Dan Ives of Wedbush, who sees Apple stock climbing 45% to $185 in the foreseeable future, did not hide mild disappointment, citing “surprisingly no new product introductions”. But Mr. Ives’ fellow bull Katy Huberty, at Morgan Stanley, took a step back and pointed out that the software upgrades set Apple up for success in the longer term:

“Apple's vertically integrated ecosystem of world-class hardware, software, and industry-leading services remains a key point of differentiation that competitors cannot replicate.”

This take is very much aligned with my view on this year’s WWDC that, by upgrading software and continuing to work on cross-platform features, Apple boosts its brand as a key household name. I see this as a positive for the investment thesis, although mostly for the long term (i.e. not a short-term catalyst).

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Even bears were caught off guard

While new device or chip announcements during WWDC were perceived to be potentially bullish developments, even the bears were expecting to see them this year. Goldman Sachs’ Rod Hall, a notorious Apple bear until recently, and Wolfe Research’s Jeff Kvall anticipated the launch of a MacBook Pro during the developers’ conference.

Following the event, both analysts focused not on the short-term implications of the news surrounding WWDC, but on the longer-term risks of investing in Apple stock. Among them, the following stand out:

  • In the near-term, iPhone sales could decelerate into fiscal 2022. This might be particularly true if the next iPhone upgrade proves to be a “redesign cycle”.
  • The post-pandemic demand normalization could lead to decelerated growth in other product categories as well: e.g. iPad and Mac.
  • Excitement over the 5G upgrade wave and the speculated Apple Car could be overstated and too aggressively priced into Apple stock already.

Although I remain optimistic about an investment in AAPL shares, especially while the stock remains stuck in correction territory, I appreciate the bearish perspective. I believe that the bullet points above should be considered by Apple investors and factored into their risk-return expectations.

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Twitter speaks

Apple’s WWDC continues through the end of the week, but what could have mattered to investors was already disclosed during Monday’s keynote address. How has WWDC impacted your stance on AAPL stock? Leave your vote below and follow @AppleMaven on Twitter!

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)