- Apple stock (AAPL) - Get Free Report has quite a bit of ground to cover before it can reclaim its all-time highs reached about 12 months ago.
- To return to the peak, AAPL needs game-changing catalysts. Today, we talk about three of them that could materialize in 2023.
- Be on the lookout for (1) the announcement of a mixed reality device, (2) resolution of Apple’s supply chain problems and (3) improvement in the macroeconomic landscape.
(Read more from the Apple Maven: Apple Stock: What History Says Will Happen In 2023)
Potential AAPL Catalysts in 2023
Valued at about $135 per share, Apple stock would need to climb 33% to return to the all-time high levels of early December 2021. This could happen in 2023, provided that one or a few catalysts play out over the next 12 months.
#1. Mixed Reality Hardware
The worst-kept secret in Cupertino is that Apple is likely to launch a mixed (virtual and augmented) reality device as early as next year. Rumors have surfaced and some have been proven wrong. Today, the consensus seems to revolve around the following:
- Apple’s mixed reality headset will likely be announced in the first half of 2023.
- Delays are possible due to the supply chain constraints in Asia.
- The device will likely be priced at or substantially above $2,000 initially, making it more of a niche product than an initiative geared toward broad consumption.
Research company MRFR expects the mixed reality market to grow by a dizzying pace of 43% per year through 2030, when the TAM (total addressable market) could surpass $9 billion. For reference, Apple sold a total of $394 billion in products and services in fiscal 2022.
It is hard to tell how important of a business sub-segment mixed reality will be for Apple, with the ramp up possibly taking a few years. But keep in mind that few analysts, if any, currently have any mixed reality revenue projections baked into their models.
Once enough information is available for analysts and investors to make informed decisions about their estimates, I expect to see a flurry a revisions to Apple’s revenue and EPS forecasts. It could trigger a re-rating of the stock and a rally that might be meaningful.
#2. The End Of Apple’s Supply Woes
As I have written about recently, supply chain is probably Apple’s hot topic of the day. The company is likely to have a challenging quarter of sales this holiday season, but not due to lack of demand. Rather, Apple simply cannot get its hands on enough products to sell.
The Cupertino company itself has warned that, when Apple reports fiscal Q1 results in late January, it will disappoint on iPhone Pro and Pro Max sales. The extent of the damage: some analysts have considered “a 15 million to 20 million [iPhone] unit shortfall for the quarter”.
For now, AAPL shareholders can only hope that these will be temporary problems. Once the supply chain issues are ironed out, whether through the reopening of assembly plants in China or a shift in production strategy outside China, Apple should be able to make up for lost time.
Should this happen in 2023, removal of the supply chain overhang could be a hugely bullish development for Apple and its stock.
#3. Improved Macroeconomic Conditions
As much as Apple analysts and investors may focus on company-specific matters, Apple stock is unlikely to gain much ground unless or until the global economies improve. That would involve a combination of (1) tamer inflation and (2) lack of an overly disruptive recession.
Should this bullish combo take form, probably the entire stock market would recover from its current “funk”. Apple stock represents 6% of the S&P 500 and 12% of the Nasdaq. By default, the rising tide that lifts the entire market would likely bring AAPL along for the ride.
In your opinion, which of the following events or catalysts would most likely push Apple stock back to its all-time high in 2023?
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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)