BNP Paribas hikes Apple stock target, cites memory shortage opportunity

Today, BNP Paribas raised Apple’s stock price target to $300, up from $260 set in its last investor note. Here are the details.

Apple could turn memory crunch into an opportunity

Over the past few weeks, we’ve seen several reports from research companies mapping the impact of memory shortages on the smartphone market.

These reports have generally shown that while Apple keeps reaping the benefits of the successful iPhone 17 lineup, lower-end phone makers have been hit the hardest with the ongoing memory crunch, since their margins leave little room to absorb higher component costs.

Today, BNP Paribas issued an investor note (via Bloomberg) arguing that Apple’s supply chain and scale put it in a stronger position to weather those pressures and even gain share.

For this reason, BNP upgraded Apple’s stock from ‘neutral’ to ‘outperform’, and set its price target to $300, a 15.3% bump from $260.

From Bloomberg:

“With a memory crunch having more impact on the smaller peers in the low/mid range, we think Apple can leverage its size and unique supply chain to drive iPhone share gains, coupled with continuing mix shift to premium devices,” wrote analyst David O’Connor.

While Apple is also impacted by the memory issue, he added, “iht [sic] has more levers on topline and cost to pull vs peers.”

During last quarter’s earnings call, Apple CEO Tim Cook and CFO Kevan Parekh said the company exited the December quarter with very lean iPhone inventory after stronger-than-expected demand, putting it in a “supply chase” to catch up.

They added that constraints at the time were tied to chip production limits rather than memory, which had little impact in the December quarter, but was expected to weigh more on margins in the March quarter, which Apple is expected to report on April 30.

Cook also said Apple has “a range of options” to deal with rising memory costs, without going into specifics.

Apple’s stock closed at $270.23 today, up 2.59%. The stock is up nearly 5% since its last quarterly results, despite recent market-wide volatility tied in part to the conflict involving Iran.