Citi remains bullish on Apple ahead of earnings report

Yahoo Finance Live's Brian Sozzi discusses a Citi analyst's bullish take on Apple.

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BRIAN SOZZI: Indeed it is. All right, it's time for our calls of the day, guys. I'm out of the chute here with what is a-- I would call a blunt take on Apple ahead of their earnings on October 27. Really interesting note by Citi analyst Jim Suva. You see Apple shares up there slightly here in the early going. The headline of this report absolutely got me right up my alley. I love some of these crazier headlines.

And this one got me. He said, we are not scared of Apple stock, despite Halloween and investor fear. So he noted Apple stock, very Google SEO friendly. Nonetheless, he's listening. Are we saying that iPhone demand continues to be very strong? They're selling more higher priced products. That is good. Sticky services sales, that is good. Also suggesting more of an Apple car push in 2025.

So this is more of a longer term bullish take by Suva at Citi. I think he acknowledges some concerns here going into the quarter, some FX challenges, maybe some slowdown in China. But by and large, just trying to, I think, bring a sense of, hey, guys, this is Apple. They're going to get past any rough patch brought on by the global economy.

BRAD SMITH: Yeah, I think one thing that we do have to note within this as well is that for the iPhone, the demand is typically going to always be there. It's just a matter of where they are in the cycle, especially because so many people are able to pay off their phones through another type of necessity, which is your telecommunications, which is your phone carrier.

And so that is perhaps one of the constants. It's just a matter of how much people are willing to take on a larger contract or go after a more expensive phone if their telephone provider or their service provider is able to offer them a better deal.

Now, it's a larger question, of course, too, right now, of where-- and even the little luxuries we were talking about with Pepsi, where that also kind of dovetails on over into the technology landscape as well on the consumer tech front. Do consumers look at some of the little luxuries and the wearables and say, hey, that's a little luxury? Or is my service a little luxury that I can maintain?

And for Apple, they've been continuing to build out that services business, can be potentially an $80 billion run rate business, either by the end of this year or early next year. And so that's something to continue to watch going forward in the services and the wearables division for Apple.

JULIE HYMAN: Yeah, even if it might see some rockiness in the short-term from some of those production cuts that we've talked about.

BRAD SMITH: Absolutely.