With the company — and the stock — on a tear, a checklist of what could go wrong
Bernstein Research’s Toni Sacconaghi, an analyst with a long history of bearish Apple AAPL predictions (see below) chose an odd day to make what he calls the “bear case [for] a darling among buyside investors.”
Apple was trading at record highs for the third day in a row Monday when Sacconaghi offered his clients these bullet points:
- Apple’s market cap is too large for it to outperform, and its image has migrated from underdog to Silicon Valley bully, which will increasingly pit competitors against it.
- Increased regulatory scrutiny threatens to undermine Apple’s powerful iOS ecosystem.
- Sustained growth in iPhones will inevitably lead to margin pressure.
- Near-term expectations for iPhone and iPad units are getting heady, risking disappointment.
- Apple insistence on retaining cash points to a risk of the company squandering it on a flawed acquisition.
In the end, the analyst seems unconvinced by his own analysis.
Apple opened at $277.75 and hit a new intraday high of $279.01 before falling back in mid-morning trading.
A few of Sacconaghi’s greatest Apple hits:
- Apple sales data: Half empty, half full
- The $800 rumor that spoiled Apple’s party
- The case of the 1.4 million missing iPhones
[Follow Philip Elmer-DeWitt on Twitter @philiped]