Analysts: Apple is still the best bet in a tech spending slowdown

In the increasingly likely event of a slowdown in consumer spending on tech hardware amid rampant U.S. inflation, Apple is still the best bet, analysts say.

Jack Denton for Barron’s:

With inflation at 40-year highs, “consumer spending intentions are turning more cautious, even for high-end consumer,” wrote [Morgan Stanley] analysts led by Erik Woodring in a note.
The team at the bank said that low- and mid-range consumer spending has been deteriorating for months, but that so far high-end spend has held up. That’s crucial because the top 20% of earners in the U.S. make up 40% of spending. But with the S&P 500 in a bear market, consumer confidence at a decade low, and inflation on everyone’s minds, “the risks of a pullback at even the high-end consumer are rising,” the analysts said.
Morgan Stanley sees the companies that make discretionary products and benefitted from the pandemic as at the greatest risk, but no one is spared: The bank has cut estimates for 2023 revenue in the sector by 5%, on average. 
The last stock standing was Apple. While the tech giant and iPhone maker’s stock price was reduced to $185 from $195, the company remains the single stock in the sector rated at Overweight by Morgan Stanley.

MacDailyNews Take: Apple’s demographic advantage (well-heeled customers) make the company more likely to hold up during times steeped in malaise.
The price tags on and features of Apple’s products are an IQ test. They are a filter that Apple uses to skim off the desirable customers and leave the leftovers to the knockoff peddlers. — MacDailyNews, October 18, 2013
Apple targets high-value consumers. Apple separates the wheat from the chaff with their value proposition. – MacDailyNews, November 13, 2013
Unit sales do not equal profit share. Unit sales most certainly do not equal customer quality. 1,000 cheapskates who buy nothing do not equal one quality customer who participates routinely in a vibrant ecosystem. — MacDailyNews, December 2, 2013
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