Apple Park photo of the side of the main buildingSource: Apple

What you need to know

  • Morgan Stanley analyst Katy Huberty released a new investor note.
  • The analyst believes the recent underperformance of the stock price is "likely overdone."

Apple's stock price is seeing a bit of a dip despite overwhelming demand for its products and stellar financial performance as of late.

As reported by AppleInsider, Katy Huberty, lead analyst for Morgan Stanley, wrote an investor note that says the stock price should catch back up and that its dip is only temporary.

In a note to investors seen by AppleInsider, lead analyst Katy Huberty writes that supply chain data analysis suggests that iPhone demand hasn't slowed. As a result, there's potential upside to Morgan Stanley's June quarter iPhone forecast.

The bank's Asia supply chain team recently raised its June quarter iPhone build forecast to 44.5 million units, up from 43 million, based on better-than-expected demand for the iPhone 12 Pro Max.

Additionally, Apple supply chain partners in Taiwan reported sales increase of 13% year-over-year in April. That marks the seventh consecutive month of yearly revenue growth after the launch of the iPhone 12 lineup, Huberty writes.

Huberty currently believes that Apple will ship 41 million iPhones in the June quarter.

For Apple's iPad, Morgan Stanley's supply chain team raised its build forecast to 16.8 million, up from 16 million. Huberty believes that Apple will ship around 13.5 million iPads, given the supply constraints currently plaguing the industry.

Data in China also paints a positive picture for Apple going forward. Huberty highlights the fact that the company reported its eighth consecutive month of year-over-year installed base gains in China in April. While smartphone sales in China were weak in April, Huberty believes that apple outperformed domestic vendors by about eight percentage points.

The analyst says that Apple's recent under-performance with its stock price is "likely overdone."

"While we need to watch App Store growth over the coming months, we believe Apple's recent under-performance is likely overdone ... given the improving iPhone and iPad data points."