Analyst Note| Abhinav Davuluri |
Apple reported weaker fiscal first-quarter results that fell short of our estimates due to a combination of supply shortages for its iPhone 14 Pro models, macroeconomic challenges, and foreign exchange headwinds. We have been anticipating a slowdown in the firm’s hardware products following several years of strong growth related to COVID-19-induced work- and learning-from home trends as well as the initial rollout of 5G. Shares fell modestly during after-hours trading and are relatively in line with our unchanged fair value estimate of $150 per share. Although we remain positive on wide-moat Apple’s iOS walled garden, we expect the upcoming quarters to be challenging and thus recommend prospective investors wait for a wider margin of safety.