Apple: We Expect New Models and New Chip to Spur Return to iPad Growth, in Line With Our Thesis

We maintain our $170 fair value estimate for the shares of wide-moat Apple, as our forecast is unchanged following the release of updated iPad models. We’d been expecting new iPad models this spring, and the upgrades matched our general expectations for performance improvement. We were impressed by Apple’s newest chip, the M4, which will slot into the iPad Pro. We retain our view that these updated models will spur new refreshes and end what we expect to be three years of revenue declines for the iPad. We project year-over-year and sequential iPad growth over the next three quarters. We see the stock as fairly valued.