Apple could be worth $3 trillion next year as it benefits from 'unprecedented upgrade cycle' fueled by iPhone 12, Wedbush says

• Apple could reach a $3 trillion valuation next year thanks to the "unprecedented upgrade cycle" its experiencing thanks to strong iPhone 12 demand, Wedbush analyst Dan Ives said on Tuesday.
• Apple could sell an eye-popping 250 million iPhones this year, which would break its 2015 record of 231 million units, according to Ives.
• "If Apple continues to execute at this pace, a $3 trillion market cap could be on the horizon over the 12 to 18 months," Ives said.
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Apple's iPhone 12 success could set it up for a blockbuster year that leads to a $3 trillion valuation, Wedbush analyst Daniel Ives said in a note on Tuesday.

Ives' Asia supply chain checks continue to point to incrementally bullish data points for demand tied to Apple's iPhone 12. Based on the most recent checks, Ives now believes that Apple built more than 90 million iPhone units last quarter, above his previous estimate of 80 to 85 million.

"We have not seen a launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014," Ives explained. While Wall Street currently expects Apple to sell 218 million iPhones in FY2021, Ives thinks this number can potentially reach 250 million units, "an eye popping figure," Ives said.

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If Apple does sell 250 million iPhone units, that would far exceed its previous record in FY2015 of selling 231 million units.

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"This will translate into an unprecedented upgrade cycle for [Tim] Cook & Co.," Ives said.

China demand has also been a point of strength for Apple's new iPhone 12, "with positive trends heading into 2021," the note said. A new design and 5G capabilities are driving the demand for the new iPhone, as well as an estimated third of Apple's near 1 billion iPhone install base who are due for an upgrade. Ives reiterated his bullish view on Apple with a $160 price target, and a $200 bull-case price target, representing potential upside of 24% and 55%, respectively.

"If Apple continues to execute at this pace, a $3 trillion market cap could be on the horizon over the next 12 to 18 months," Ives concluded. Apple currently trades a market cap of $2.15 trillion.

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