Apple Could 'See Bottom Soon,' Macquarie Analyst Predicts

Macquarie Research issued a company note on Apple Inc. (NASDAQ: AAPL) after the company reported first-quarter revenue. The firm rates Apple as Outperform with a $117 price target.

Analyst Ben Schachter wrote, "In our view, aside from the macro, investors shouldn't read too much into the declining iPhone beyond the simple fact that there was massive pent-up demand for a larger screen. AAPL is still taking share and we expect that to continue. While iPhone 7 may not fix everything, we expect it to return AAPL to growth."

Macquarie highlighted two key insights that can drive the company going forward.

Related Link: Apple iPhone Shipments Haven't Peaked, More Growth Coming

1. Increases in research and development

Analysts noted CEO Tim Cook's message to investors that Apple will continue to accelerate investment in research and development in order to create innovative products. While many expect the introduction of the iPhone 7 to help drive sales growth, there are still opportunities for Apple to create new products that have the potential to revolutionize the marketplace.

2. Expansion of the App Store

Macquarie wrote that Apple has the opportunity to invest more into creating applications that work seamlessly with the iPhone. As apps are the fastest growing and highest margin business for the company, analysts expect Apple to expand beyond the typical gaming platform into services that enhance the quality and convenience of people's lives. These include applications that assist industries such as healthcare, home automation and fitness.

Shares of Apple recently traded at $95.56, down 4.43 percent.