The No. 1 ‘set and forget’ stock in tech hardware for next year? You guessed it.
Apple Inc. enters 2023 with production issues in China, concerns about consumer spending and a laundry list of long-term projects.
But all that aside, his stock AAPL,
continues to be Evercore ISI’s top “set and forget” pick within the technology hardware space heading into the new year.
“While we understand investors are concerned about the short-term iPhone
outlook given manufacturing disruption issues in China, we view any headwinds as transitory and investors should remain focused on the longer-term opportunity,” Evercore’s Amit Daryanani wrote in a Friday note to clients.
In 2023, the smartphone giant has an opportunity to make progress on its “moonshot” efforts, he continued.
“We feel confident that Apple is working on AR/VR [augmented reality/virtual reality] products and it will likely be the next big hardware product,” he wrote. “On the software side, Apple is making big moves in advertising and payments that are generally undervalued by investors.”
See also: Apple faces risk of ‘perishable demand’ for iPhones, analysts say
According to Daryanani, Apple’s series of patents and its pattern of recent acquisitions indicate a “high probability” of a new device launch in the next six to 12 months. It could be a headset that supports augmented and virtual reality or the rumored “Apple Glass” glasses.
“Conservatively, should the AR offering have a comparable trajectory to Apple Watch, it could contribute $18.1 billion in sales and 19 cents of EPS [earnings per share] at scale,” he said.
In terms of payments, Apple’s opportunities to gain traction include the Tap to Pay on iPhone initiative, which allows people to turn their phones into payment acceptance devices, and increasing the number of merchants that accept Apple Pay online.
“Apple’s interest in financial services makes a lot of sense, as a large part of their digital services strategy revolves around building ‘toll booths’ throughout the ecosystem,” Daryanani wrote of the initiative, which generated $11.6 billion in revenue at fiscal 2026 can pay up. , according to his estimates.
Read: Apple plans big change due to European legal pressure, report says
Other names that Daryanani holds in hardware and networking are Amphenol Corp. APH,
CDW Corp. CDW,
Arista Networks Inc. ANET,
Cisco Systems Inc. ANET,
Juniper Networks Inc. JNPR,
Pure Storage Inc. PSTG,
and Vertiv Holdings LLC. VRT,