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Jan. 24, 2020, 9:31 a.m. EST

Apple shares are bound for $400, says analyst who helped spark Tesla rally this week

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By Barbara Kollmeyer, MarketWatch

AFP via Getty Images
Apple in the market’s eye

A week that started with a coronavirus panic looks set to end on a high note. Earnings optimism and the fact that investors no longer seem to be panicking over the deadly China illness is helping.

Wall Street has also been distracted by red-hot Tesla /zigman2/quotes/203558040/composite TSLA -4.06%  shares, up 12% this week. The stock has now more than doubled over three months. While some warn of nosebleed territory, consumer advocate Ralph Nader said Tesla could end up triggering a market crash.

To be sure, other stocks may be getting far less attention, which brings us to our call of the day from Wedbush analyst Dan Ives who has bumped his Apple /zigman2/quotes/202934861/composite AAPL -3.39%  share price target to $400 from $350. He says Wall Street is underestimating a renaissance for the iPhone maker, and the “magnitude of the 5G upgrade cycle.”

Ives is upbeat after a visit to Asia, where he says iPhone suppliers appear to be doing well, implying customers want to buy. He added that AirPods demand is “jaw dropping,” and he expects upbeat results next week and strong March guidance.

“While the stock has had a massive rally over the past year and thus far in 2020, we continue to believe this is a ‘must own’ stock into what we would characterize as a transformational 5G supercycle over the next 12 to 18 months with Apple being our favorite 5G play,” said the analyst who has been pounding the table over Apple’s fortunes lately.

Apple shares are up around 9% so far this year, 31% over three months and 53% in the past six months. Note that Ives helped fuel the rally for the electric-car maker’s shares this week by bumping up his price target 50%.

Bottom line, he says, all the good news isn’t baked into the share price yet.

Note Apple results are due Jan. 28 and Tesla Jan. 29. As for Apple this morning, Ives’s call isn’t boosting them in a big way so far.

Read: Broadcom says deals with Apple could be worth $15 billion

The market

The Dow /zigman2/quotes/210598065/realtime DJIA -3.15%   , S&P /zigman2/quotes/210599714/realtime SPX -3.03%    and Nasdaq /zigman2/quotes/210598365/realtime COMP -2.77%   are up in early action, while European stocks /zigman2/quotes/210599654/delayed XX:SXXP -1.59% rallied hard. Asia was largely quiet as several markets closed for the Lunar New Year holiday. The Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.79%  inched up.

Bitcoin /zigman2/quotes/31322028/realtime BTCUSD -2.34%  has lost over 6% this week amid talk of slowing demand ahead of the China holiday.

The chart

Crude /zigman2/quotes/209723049/delayed CL00 -1.32%  is down nearly 10% so far this year, but better times are ahead, according to our chart from Adam Kobeissi of The Kobeissi Letter . He sees crude dropping to $55.90, then a “final washout” before it charges back to $60 a barrel.

Kobeissi Letter
US : U.S.: Nasdaq
$ 799.91
-33.88 -4.06%
Volume: 17.29M
Feb. 25, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$147.50 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 288.08
-10.10 -3.39%
Volume: 57.67M
Feb. 25, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1260.49 billion
Rev. per Employee
US : Dow Jones Global
-879.44 -3.15%
Volume: 513.27M
Feb. 25, 2020 4:59p
-97.68 -3.03%
Volume: 3.13B
Feb. 25, 2020 4:59p
US : U.S.: Nasdaq
-255.67 -2.77%
Volume: 3.07M
Feb. 25, 2020 5:16p
-6.44 -1.59%
Volume: 0.00
Feb. 26, 2020 11:49a
JP : Nikkei
-179.22 -0.79%
Volume: 0.00
Feb. 26, 2020 3:15p
US : CoinDesk
-219.29 -2.34%
Volume: 0.00
Feb. 26, 2020 6:09a
US : U.S.: Nymex
$ 49.24
-0.66 -1.32%
Volume: 219,960
Feb. 26, 2020 5:59a
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