CNBC spoke Monday (Dec. 30) with Citi analyst Jim Suva, who said watch sales will come as a “surprise” to investors during the first fiscal quarter of 2020, which will help Apple’s stocks continue to surge and move the company closer to Suva’s $300 price target.
In October, Apple released its earnings, which impressed analysts with the high volume of sales for its wearables segment, which includes the watches and AirPods, along with headphones from the Beats brand.
That was the second consecutive quarter in which growth on those sorts of items was reported, which showed analysts that Apple had potential for growth beyond its original iPhone.
The Apple Watch was first released in 2017 and now has a lower cost than newer models, coming in at around $199. Because of that, it has become attractive to teenagers and those on lower incomes.
Suva told CNBC demand for the wearables has become so great recently that they’ve been selling out, and people have had to wait much longer than usual to get them. Suva said the supply issues are not indicative of any manufacturing delays, but rather the sheer number of people who want the products. He said the delays could be as long as several weeks.
On Monday, Apple’s stock was up 0.5 percent at about $291 per share. The stock was up 84 percent this year overall, making it the best performer in the Dow Jones Industrial Average.
But Apple isn’t content to stop there, as analysts said the company’s new 5G iPhone will eventually raise the stock up to $350 per share.
The 5G iPhones could potentially be released in four phases, which could continually raise Apple’s stock prices, analysts said. 5G technology has the potential to allow for faster connection speeds and more capabilities in line with newer tech, like autonomous cars.