The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Apple Stock Forecast

Summary:

Due to continuing problem over exploding batteries, Samsung has officially stopped the sale of its Galaxy Note 7 Android phablets.

Apple’s stock hit a new 2016 high after Samsung made the said announcement.

Apple definitely benefits from Samsung’s problem over the Galaxy Note 7. People who got disappointed with Samsung’s flagship phablet will probably buy the iPhone 7 Plus.

It is therefore smart to go long on AAPL now while it still trades below $120. The holiday shopping season is coming soon.

Apple has strong buy signals based on its near and long-term algorithmic forecasts.

Apple’s stock price hit a new high of $116.75 after Samsung (SSNLF) announced that it is stopping the global sales and distribution of its Galaxy Note 7 Android phone. Samsung has also told people to power down their Galaxy Note 7 handsets and have them replaced with other Samsung phones. The PR disaster over a replacement Galaxy Note 7 still bursting into flames inside an airplane is great news for Apple shareholders.

The lingering problem over the exploding batteries of some Galaxy Note 7 will help Apple sell more of its iPhone 7 Plus phablet. Many people who got disappointed with Samsung’s inability to fix the Galaxy Note 7’s battery problem will likely ask for a refund (instead of exchanging their Note 7 for a Galaxy S7). They will then probably use the refund money to buy an iPhone 7 Plus.

The iPhone 7 Plus could be a great alternative to the Note 7. The iPhone 7 Plus has no exploding battery and it trounces the Note 7 in graphics and system benchmark tests. People will only need to buy a $5-to- $20 stylus to replicate the Note 7 experience on the iPhone 7 Plus.

(Source: AnandTech)

Source: AnandTech

Consequently, stronger iPhone sales from Samsung’s recall of the Galaxy Note 7 can only propel AAPL’s price to greater heights. The people who heeded my advice last August to go long on AAPL before the iPhone 7’s release already made some profit. I still encourage people to go long on AAPL especially after Samsung’s recall of its Galaxy Note 7 Android phablet.

The iPhone 7 Plus Will Be This Year’s Best-Selling Phablet

With Samsung’s phablet out of the market, the iPhone 7 Plus will likely only face competition from Chinese brands and Alphabet’s (GOOG) Pixel Plus flagship phone. The iPhone 7 Plus will have little problem competing with Pixel Plus. It is true that Alphabet’s latest Android phone could outperform the cameras of the iPhone 7 Plus. However, not many people will trust a first-generation Pixel Phone.

I am one of those people who are often wary of first-generation products – they are usually laden with bugs or errors. The first versions of Pixel phones will likely come with bugs that could annoy people. There are many of us phone buyers who do not enjoy being test subjects for new phones. Apple has already proved that it could create great phablets with its iPhone 6 Plus and iPhone 6s Plus products. The iPhone 7 Plus will therefore greatly outsell the Google Pixel Plus.

The shopping season is almost upon us. It is my fearless forecast that Samsung’s failure to fix the Galaxy Note 7 will again elevate the iPhone 7 Plus as this year’s best-selling phablet.

It will be up to Apple and its manufacturing partners if they could supply enough iPhone 7 Plus to meet greater market demand.

Conclusion

It is annoying that Apple still is unable to eradicate the lingering short supply of iPhone 7 and iPhone 7 Plus. Apple has to address this short supply problem as soon as possible. There are many people who like the big displays of a phablets like the iPhone 7 Plus. I hope Foxconn will prioritize production of the bigger iPhone 7.

Apple did not act quickly enough to meet the expected increased demand for the iPhone 7 Plus. Samsung already suffered early exploding batteries on Galaxy Note 7 since August. Nevertheless, Samsung’s current crisis over its Note 7 Android phablet is still a blessing for Apple.

I have a Strong Buy rating for AAPL. My 100-day price target for AAPL is $125. TipRanks-tracked analysts have a consensus price target of $128.52 for AAPL. I expect Apple to report impressive December quarter earnings on January 2017.

The near and long-term forecasts from I Know First are also signaling that AAPL is a Buy right now. The self-learning algorithm of I Know First is confident that AAPL still has very large upside potential. It also understood my assessment that Samsung’s tragic mistake in the Galaxy Note 7 is really good for Apple’s iPhone 7 sales.

I Know First Past Success With AAPL

I Know First has been bullish on AAPL in past forecasts. On May 20th, 2016, an I Know First analyst wrote a bullish article regarding AAPL, in accordance with our state of the art algorithm. Since then, Apple shares have been up more than 28% to date.

This forecast was sent out to I Know First subscribers on May 15th, 2016. To subscribe now click here.