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Best tech/finance blogger on TipRanks. Alex Cho is ranked 7th among all financial bloggers, with a sector focus of technology stocks. The research he publishes captures the long-term growth potential of tech franchises, and market valuation. His research recommendations over the span of five-years has averaged into an annualized return of 19.3% across 392 ratings of which 66% were successful. Over his years of publishing, Alex Cho has been an indispensable source of information for an investment minded audience, which is why his lifetime viewership has exceeded ten million in total since 2012, across various media platforms. Furthermore, he’s frequently cited in various local business journals across the United States, and is frequently tagged with the “in-depth” designation on Google News for his public articles. The quality of his research is well known, and is well-respected which is why he’s frequently cited by other authors, journalists, bloggers and experts. Alex Cho was a former founding partner of Alexander & Cohen Capital Management, has worked as a consultant for mid-stage tech companies looking to raise capital or form an exit strategy, with the most recent consultation billed to a client that was generating revenue of $10 million+ in the web domain/registrar segment. Alex Cho is frequently invited to interview members of management at various Fortune 500 tech companies’ due to his outstanding media credentials, and credibility. Furthermore, he frequently attends various tech media events at the request of the event organizers. Alex Cho has a great relationship with Wall Street and Silicon Valley, as well. In the Venture Capital Space, he has sources that are inclusive of VC Partners, and independent research from PitchBook, Mercury Data, eMarketer, MergermarketGroup, and so forth. Anyone facing the public with investment related material needs quality sources, which should be inclusive of insights from Private Equity and various sell-side institutions and debt rating agencies as well (Standard & Poor’s, Fitch, & Moody’s). Alex Cho publishes with the support of Bank of America Merrill Lynch, Morgan Stanley Americas, Royal Bank of Canada Capital Markets, United Bank of Switzerland AG, Barclays Americas, Goldman Sachs, J.P. Morgan, Credit Suisse AG, PiperJaffray, Wedbush Securities, Oppenheimer & Co., Nomura Securities, BMO Capital Markets, Raymond James, Pacific Crest, SunTrust, Mizuho Securities, Deutsche Bank and Canaccord Genuity. Alex Cho attended ASU via the MAPP program with a 3.76 GPA in business-finance. The genius behind Cho has less to do with his academic accomplishments, but rather his ability to navigate, adapt, and improve the quality of his work through all the activities he has engaged. In the past year, Alex Cho has launched a new marketplace service referred to as Cho’s Investment Research. To learn more about this service, or to receive article notifications, be sure sure to subscribe. We provide frequent updates via our Blog Posts, which goes out to our subscribers.

Apple (AAPL) Stock Has Had a Good Run, But Can the Momentum Continue?

Apple (AAPL) had a solid month in terms of stock returns given the slew of announcements tied to services, Chinese iPhone price reductions, and analyst commentary mostly positive in the weeks leading into April. While, there’s a lot of momentum tied to the stock price, the expectations tied to the business and whether there’s still an upgrade ramp for new devices has been explored further among analysts on the street. Expectations tied to Q2’19 earnings are modest, as device shipments are expected to remain flat to negative when pertaining to Apple iPhone given the fallout from the prior-quarterly earnings announcement.

Apple stock managed to rally from $180 to $200 per share in the past month. Sustaining this type of stock price momentum is contingent on a number of factors going correctly. Perhaps on-going efforts to figure out the China related issues, announcement of new products, and some more momentum on product refresh or upgrades throughout the course of the year. The stock price recovery could be aggressive otherwise, as the S&P 500 is already hovering near all-time highs, and so if the broad market is buying up stocks in general, Apple’s recent price improvement may have less to do with the company, and more to do with broadness of optimism for stocks in general.

To sustain momentum some believe Apple should cut the price of the iPhone XR (lower-end equivalent of the iPhone trifecta), which could improve demand for the iPhone in general in regions like China were the pace of upgrades have slowed considerably.

Daniel Ives from Wedbush mentioned in a note (while also raising his price target from $215 to $225):

“Cutting prices in China on XR by up to 20% and pulling forward roughly 15 million-20 million iPhones (based on our estimates) over the next 3-6 months that would otherwise sit idle waiting for the next release, or worst case, move to lower priced competition is key as the last thing Apple can risk now is writing off an entire upgrade cycle in China. We maintain our OUTPERFORM rating and are raising our price target from $215 to $225 to reflect more stable demand trends in the field and a valuation starting to get more “Street cred” for the linchpin services segment.”

The key is whether or not Apple is going to do any further price adjustments in China when pertaining to its lower-end equivalent device. The upside scenarios tied to further price reduction could be the difference between a solid or great year in terms of unit shipments, albeit it’s difficult to determine what the optimal price point would be, as lower pricing for XR would translate to lower ASPs.

Furthermore, we’re nearing full saturation among certain demographics in the United States with more affluent households among gen Z skewing predominantly towards iPhone and not Android devices.

Source: PiperJaffray

Currently, 83% of teenagers who partake in the PiperJaffray survey disclose that they own an iPhone device, and of that figure 86% anticipate that their next phone will be an iPhone. This implies a very modest growth scenario here in the United States, as we’re nearing full market saturation among the younger age cohorts. It’s certainly possible that upgrades could help, but we’re at the point where Apple would need to spark a miraculous turnaround in China, as there’s little growth opportunity, but healthy enough upgrade opportunities to keep revenue flat or growing by single digits in the United States.

The iPhone business is starting to transition into more of a cash cow business, and efforts to further saturate the smartphone market while noteworthy will eventually lead to diminishing returns. Apple’s strategic execution tied to other device and service categories drive the growth narrative going forward, but the iPhone business needs to remain stable with flattening comps to keep shareholders from panicking.

To read more on the nitty gritty of what’s going on in the tech industry, click here.

Disclosure: The author has no position in Apple stock.

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