APPLE

The Oscars 2022 marked a first of its kind. No, we’re not talking about the first actor-to-actor award ceremony live slap, but rather the first time a streaming service was behind the year’s Best Picture award. Maybe not quite as surprised as the look on Chris Rock’s face following Will Smith’s assault, most were still taken aback by CODA’s shock win, a film which has come off the Apple TV+ production line.

The fact Apple (AAPL) is also the first streamer to win the coveted Best Picture award, ahead of Amazon and the far more successful Netflix is not lost on Wedbush’s Daniel Ives who calls the triumph a “’drop the mic moment’ for Cupertino that should significantly bolster its subscriber base while attracting more A+ Hollywood talent to its platform for future projects.”

It is also a vindication of sorts for Apple, considering that when the tech giant launched its service less than 3 years ago, many within “traditional Hollywood circles” thought Apple would with fail with its streaming ambitions.

Ives reckons the platform currently has around 25 million paid subscribers and ~50 million global accounts, which is only a “fraction” of the subs other streaming “stalwarts” boast. With Apple still trying to “figure out their path to growth,” Ives expects the win will give a boost to the subscriber count. It should also provide Apple with a confidence boost to potentially double its own content efforts.

With $200 billion of cash on the balance sheet, and Apple’s spend on original content only at ~$7 billion annually, Ives thinks the company is gearing up to do so, with the Oscar night success providing validation for the platform.

“We view this Oscar win as a game changer for Apple on its content efforts and legitimizes the Apple TV+ as a major streaming platform with much more success ahead and the Street now starting to take more notice,” the analyst summed up.

Overall, Ives rates Apple shares an Outperform (i.e., Buy) along with a $200 price target. The figure implies ~14% upside from current levels.

The majority of Street analysts agree with Ives’ assessment; based on 23 Buys vs. 5 Holds, the stock boasts a Strong Buy consensus rating. Going by the $193.36 average target, the shares will appreciate by 10% in the year ahead.