Apple: 'A Great Core Holding,' Says Bernstein’s Sacconaghi

Toni Sacconaghi, Bernstein’s senior research analyst, joined CNBC’s ‘The Exchange’ to discuss his outlook on Apple (AAPL) amidst recent market trends. Apple’s shares have seen a disappointing start to 2025, dropping nearly 8%, and are on track for their first three-week decline since last April. Sacconaghi, however, views this downturn as a buying opportunity, suggesting that the stock could be a good buy around $220 per share, approximately $9 lower than its current price.

Sacconaghi, who is nearing the end of his long career at Bernstein, having had his last investor call earlier in the day, shared his perspective on Apple’s future. He noted that while Apple has had a tremendous run, its current valuation is close to its peak multiple, and the iPhone 16 cycle might not be as strong. He anticipates a possible dip in near-term numbers and advised investors to wait for a better entry point, ideally between $200 and $220, with Bernstein’s price target set at $260.

He emphasized patience, suggesting that investors wait until the March or April timeframe when the outlook for the next iPhone cycle becomes clearer. Sacconaghi sees potential for Apple’s earnings to reach $9 per share in fiscal 2026, which at a 32 times multiple could value the stock at around $290. He concluded by saying, “it’s a great core holding,” but urged investors to be opportunistic about their entry into the stock.

The conversation also touched on broader trends in technology valuations. Sacconaghi explained that the sector’s shift towards software-oriented business models has led to higher margins, more predictable revenues, and better free cash flow, justifying higher multiples for tech companies compared to historical norms. He noted that tech stocks now trade at about a 40% premium over the broader market, up from a 20-25% premium, reflecting the sector’s faster growth and stability.

As Sacconaghi, a top notch analyst, steps back from his role, he expressed that although he will no longer cover companies actively, his interest in these “children” of his professional life would persist, indicating a lifelong passion for the sector he has been part of for 26 years.