Wedbush Securities analyst and regular Apple bull Daniel Ives said in a recent note to clients that the iPhone maker’s upcoming earnings report for its fiscal first quarter of 2023, scheduled for Thursday, February 2, will be the “most important earnings” for the tech market (via Apple 3.0).
“After a horror show year in 2022 we believe tech stocks are as underowned as we have seen since 2009,” Ives told investors in his note.
2022 was the worst year the global smartphone industry has seen since 2013, with shipments dropping a whopping 18.3% year-over-year between October and December alone.
Apple wasn’t immune to supply chain turmoil and demand headwinds this past year, either. In its holiday quarter, historically the company’s biggest of the year, iPhone shipments declined 14.9% year-over-year.
On top of waning consumer demand, Apple was also impacted by production disruptions at the world’s largest iPhone factory, operated by Foxconn in Zhengzhou, China. Worker unrest at the plant and the resulting production slowdown reportedly cost Apple several million iPhone 14 Pro units in the all-important holiday quarter.
“The most important earnings for the market will be Apple’s, which will give a glimpse into the overall demand story for consumers globally while giving a snapshot of the China supply chain issues starting to slowly abate,” Ives wrote.
According to a report from earlier this month, Apple is cutting component orders with suppliers for AirPods, Apple Watch, and MacBooks.
Demand for iPhone 14 Pro models, however, is persevering even in these harsh macroeconomic conditions, per Wedbush’s research. “Based on our recent Asia supply chain checks we believe iPhone 14 Pro demand is holding up firmer than expected,” Ives said.
The analyst went on to note that Wall Street has all eyes on Apple CEO Tim Cook’s commentary for the company’s March/June quarters. Ives expects the tech giant to be more prudent around its guidance for the March quarter.
“With roughly 20% of its golden installed base not upgrading their iPhone in ~4 years we believe Apple remains in a unique situation to withstand this economic storm better than its tech peers. Apple will likely cut some costs around the edges, but we do not expect mass layoffs from Cupertino this week.”
