What to do with the stocks of Apple, Bank of Montreal and Canadian Pacific Kansas City? Here are some analyst recommendations that could move prices soon. Note: the author may have a totally different opinion from that expressed by the analysts.
APPLE (APPL, US$171.56): On the lookout for the mixed reality headset
The next WWDC conference will highlight the latest technologies developed by Apple, including a mixed reality headset that could well propel a good part of the company’s revenue in a few years, estimates Bank of America.
In addition to updates rolling out to iOS, iPadOS, macOS, watchOS and tvOS, analyst Wamsi Mohan also expects the unveiling of a mixed reality headset, a product that could prove transformative for the company with the weather.
Despite slow public acceptance of virtual and augmented reality headsets, added to lukewarm enthusiasm surrounding the Metaverse, the analyst suggests not to underestimate Apple, which has a history of inventing new categories products that have the potential to destabilize the market (such as AirPods) or create an entirely new market.
Keep in mind, he continues, that the headset will be cheaper, more efficient and will have more applications (gaming, entertainment, productivity, fitness, education, training, shopping, social media, etc.) than the which will be presented this year.
Wamsi Mohan adds that he expects the adoption of the mixed reality headset to substantially boost the software side (high-margin services). He estimates sales of around 200,000 units in 2023. Assuming the mixed reality headset’s software and services are more immersive in nature, he sees a hardware-to-software revenue ratio of two. In a scenario where Apple succeeds in gaining significant buy-in, it believes the headset could provide one-third of app-generated revenue by 2026.
Bank of America maintains its target price for Apple shares at US$176.