It has been one week since Reuters broke news of the rumored Apple Car. In this short period of time, Apple stock has climbed about 6.5%, while the S&P 500 did not move much.
The Apple Maven expressed its opinion on the subject:
“The $140 billion upside in market cap came on the back of mere speculation about a product that could (or might not) be released in three to four years. The spike in Apple stock seems a bit overdone, a bit too fast. It can probably be best explained by ‘knee jerk’ reaction and enthusiasm over an interesting story that, for now, does not offer much in terms of quantifiable business opportunities.”
Today, the Apple Maven looks at what other analysts have been saying about the matter.
The bullish perspective
Wedbush’s Dan Ives has been the most bullish analyst on Apple, and he maintains his Street-high $160 price target on the stock – which, at this point, represents only 19% upside to current levels.
According to Dan Ives, Apple is likely to partner with an established electric vehicle manufacturer to tap into the EV opportunity. He adds:
“The chances of a strategic partnerships with the likes of a Tesla, VW, or other auto manufacturers in China (e.g., Nio, Xpeng) are in the 70%+ range over the next few years and could lay the groundwork for a dual path (start building its own line of EV autos post 2025) over the next decade if this EV/autonomous venture is successful with consumers.”
Loup Ventures' Gene Munster also weighs in on Apple often, and he sees opportunities in subscription services for autonomous vehicles. His take on the matter sounds bullish as well, as his TAM (total addressable market) estimate transcends the mere sale of vehicles to the end user:
“Apple could either sell cars directly to consumers or offer a subscription-like transportation service similar to Zoox or Tesla robotaxi. It's highly unlikely Apple will build cars, and more likely they outsource manufacturing to an OEM partner.”
The bearish perspective
At the other end of the spectrum, famed analyst Ming-Chi Kuo’s views seem much more aligned with those of the Apple Maven.
According to him, the market is too bullish about the Apple Car opportunity. Ming-Chi Kuo believes that 2025 is the earliest that the car could hit the market, and would not be surprised to see a launch only in 2028. So, we are looking at quite a bit of investor front-running for an event that may still be eight years in the future.
The analyst adds:
“If Apple car wants to succeed in the future, the key success factor is big data/AI, not hardware. when Apple car is launched, the current self-driving car brands will have accumulated at least five years of big data and be conducive to deep learning/AI. How does Apple, a latecomer, overcome this lagging gap?"
I have run a poll on Twitter asking readers for their impression on the Apple Car news. Here is what they had to say:
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(Disclaimers: 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)