Secure the chips, absorb the costs, and grab more market share

If Apple is stressed imagine how the other guys feel.

• Analyst Mark Newman resets Apple price target, weighing in on memory cost inflation.
• Rising memory costs may increase iPhone prices, but Apple’s execution and ecosystem provide resilience.
• Apple’s AI ambitions, particularly regarding Siri 2.0, could drive a major upgrade cycle and services revenue.

Apple’s latest Wall Street price targets
Wedbush: $350 (outperform).
Goldman Sachs: $330 (buy).
JPMorgan: $325 (overweight).
BofA Securities: $325 (buy).
Morgan Stanley:$315 (overweight).
Sources: Yahoo Finance, Investing.com

Apple’s cost pressures are real, but the growth story is bigger

Despite memory cost inflation being a big deal, it still doesn’t fundamentally impact Apple’s tremendous earnings power, Newman shared in a CNBC interview.

That’s not to say he doesn’t expect iPhone production costs to rise, though.

Heightened component costs could push iPhone prices up by as much as 15%, Newman added, while bumping the overall average selling price by nearly 12% as some customers trade down to cheaper models.

Source: thestreet.com

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