Apple can skyrocket 40% in bull-case scenario as it capitalizes on 'once in a decade' 5G supercycle, Wedbush says

• Apple is set to surge as much as 40% on a "once in a decade" opportunity as it benefits from a massive upgrade cycle for its iPhone install base over the next year, according to Wedbush.
• In a note published on Wednesday, Wedbush raised its Apple price target to $600 and its bull-case price target to $700, representing upside potential from current levels of 20% and 40%.
• Wedbush said the next iPhone would represent the most significant product cycle for Apple since it released the iPhone 6 in 2014.
• The Street is underestimating the "massive pent-up demand" of the next iPhone, which will help fuel Apple's continued valuation increases, Wedbush added.
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Apple is set to continue its monster run and could rally another 40% in a bull-case scenario to $700, Wedbush said in a Wednesday note.

The iPhone maker is set to capitalize on a "once in a decade" opportunity — it's on the verge of a massive upgrade cycle for its 950 million iPhone install base as it prepares to launch a new iPhone later this year, Wedbush said.

It added that the demand for an iPhone with 5G capabilities and a new design would make the next iPhone the most significant product cycle for Apple since it launched the iPhone 6 in 2014.

Wedbush estimated that 350 million iPhone users would look to upgrade over the next 12 to 18 months.

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Wedbush also raised its base-case price target to a Street high of $600, representing 20% upside potential from Tuesday's close.

"We still believe many on the Street are underestimating the massive pent-up demand around this supercycle for Apple," Wedbush said, adding that 2021 represents a big opportunity for Apple as its monetization engine kicks into higher gear.

A report earlier this month said Apple would soon announce subscription-services bundles including Apple TV, Apple Music, Arcade, and more as it looks to better monetize these services.

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Wedbush valued Apple's services business at $900 billion to $950 billion, saying that the company continues to "flawlessly execute on the vision." For 2021, Wedbush estimated that the business would hit $60 billion in annual revenue, which "speaks to Apple's ability to further monetize its golden installed base."

Finally, China remains a "key ingredient" for Apple's success, Wedbush said, estimating that about 20% of iPhone upgrades would come from the region over the next year. And despite noise about a WeChat ban by the Trump administration, Wedbush said Apple's iPhone ecosystem would not be harmed.

Apple jumped as much as 1.5%, to $507.39, on Wednesday. Shares of Apple are up 71% year-to-date.

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