Apple Inc. (AAPL)’s Apple Watch And Apple Pay Next Drivers Of Growth: Amit Daryanani

Apple Inc. (NASDAQ:AAPL) has witnessed an impressive upward rally on its stock in the recent times. However, there have been concerns about whether the stock has spent all its energies leaving no room for further gains. On Foxbusiness, Andy Hargreaves of Pacific Crest and Amit Daryanani of RBC Capital Markets discussed the stock of Apple.

Andy Hargreaves is bearish on the stock of the iPhone maker. He cited various challenges that would make it difficult for the stock to achieve a major breakout. However, Daryanani has a bullish case for Apple, citing new products as sources of growth and strength for the company.

“[…] we think that iPhone is kind of flat. Maybe down and since that generates 70% of the company’s profits, it is hard to get the stock higher if the growth is going to be decelerating like this,” Hargreaves stated.

He further stated that although Apple Watch could bring in revenue of about $10 billion, Apple Inc. (NASDAQ:AAPL) needed more than that to make a difference.  Hargreaves cited that the amount that iPhone brings cannot be compared with what is expected from Apple Watch. That means that decline in the iPhone sales could have a serious impact on the top and bottom lines of Apple.

On his part, Daryanani argued that Apple Inc. (NASDAQ:AAPL) still had plenty of tailwinds ahead of the iPhone devices, especially with the release of iPhone 6 and iPhone 6 Plus.

“[…] Apple Inc. (NASDAQ:AAPL), I think will come out in March/April to up the capital allocation for the increased – bigger buyback, bigger dividend. We think the iPhone is alive and well. Plus better growth margin and a better capital allocation […],” said Daryanani.

 Apple Inc. (NASDAQ:AAPL) is expected to release Apple Watch early next year. It recently launched Apple Pay, a secure mobile payment that has also attracted the interest of international players. It was reported that Apple is in negotiations with Alibaba Group Holding Ltd (NYSE:BABA) to integrate Apple Pay into its payment system.

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