Citi analyst explains why Apple stock will continue to rally in 2022

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Apple Inc (NASDAQ: AAPL) has had a fantastic run this year, with shares now up nearly 35%, but Citigroup’s Jim Suva says the iPhone maker has enough catalysts to continue the rally in 2022.

Highlights from Suva’s interview on CNBC’s ‘Squawk on the Street’

To begin with, Suva sees strong demand for Apple products and services next year. He’s particularly excited about the launch of the AR/VR Headset that will be a new source of significant revenue for the tech giant. On CNBC’s “Squawk on the Street”, he said:

The AR/VR Headset is a new product category. When we look back, we think about Apple Watch, which was a new product category, and it was very big for Apple. We think the AR/VR Headset is going to be very big for them.

Suva sees countless applications for Apple’s AR/VR Headset, including in education and gaming. The American multinational is expected to launch its AR/VR Headset in the back half of 2022, but the excitement around it, Suva added, will be a positive for the stock in H1 as well.

Suva says his price target on Apple is conservative

Suva rates Apple at “buy” with a price target of $200 that represents another 15% upside from here. According to the Citi analyst, if it weren’t for the macroeconomic risks, his PT would be even higher.

It’s important to note that the world, right now, is facing some challenges. But if COVID wasn’t here and supply chain issues weren’t here, our number would be higher because demand for Apple products outpaces supply, and that’s a great problem to have.

Suva agreed that Apple had some regulatory risks as well, but brushed them off as “headline risks” and not fundamental risks. Earlier this month, Elevation Partners’ Roger McNamee said Apple was better than the rest of the mega-cap technology names.

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