Rising recession fears have put Apple stock under pressure along with the rest of the broader market, but investors may be overlooking some powerful catalysts that could reignite the bull case.
Those catalysts are new iPhones and Apple Watches, which appear to be showing strong demand out of the gate, according to Wall Street analysts.
Demand for Apple's premium models has been particularly strong. Wedbush Managing Director Dan Ives estimated that 85% to 90% of iPhone preorders were for the Pro and Pro Max versions.
"That's strong for ASPs [average selling prices] and that's trending, I believe, 8%, 10% ahead of iPhone 13," Ives said on Yahoo Finance Live (video above). "We can clearly start to see demand taper here, but at least so far, I think supply is more the issue than demand."
Preorders for the iPhone 14 series began on Sept. 9, two days after the products were launched, and at-home deliveries and in-store pick-ups started on Sept. 16. The new Airpods Pro and Apple Watch Ultra began rolling out on Sept. 23.
Others on the Street seem to agree with Ives on the robust early demand for Apple's suite of products.
"iPhone demand indications are strong following the launch, and while similar to last year the mix continues to be more favorable towards Pro models, lead times for the two Pro models are already more extended relative to last year," Samik Chatterjee, analyst at JPMorgan, wrote in a note. "Delivery lead times have already reached extended lengths one day after launch vs. extended lead times one week post-launch for the iPhone 13. Amongst the remaining products, lead-time based demand indication for the Apple Watch Ultra is quite strong as well."
The analyst added the new $800 Apple Watch Ultra is also off to a brisk start.
Despite the initial favorable reads, Apple stock has been beaten down in the September sell-off. Apple shares are down about 8% in the past month, bringing the year-to-date drop to 15%.
That pullback may be too aggressive, Ives contended.
"What is factored into Apple's stock?" the analyst said. "You are factoring in you are going to have a 5% to 7% numbers cut. I just don't believe you are going to see it based on what we are seeing today."