U.S. markets open in 3 hours 4 minutes
  • S&P Futures

    4,259.25
    -21.75 (-0.51%)
     
  • Dow Futures

    33,558.00
    -160.00 (-0.47%)
     
  • Nasdaq Futures

    13,524.50
    -53.25 (-0.39%)
     
  • Russell 2000 Futures

    2,002.90
    -14.00 (-0.69%)
     
  • Crude Oil

    88.07
    -4.02 (-4.37%)
     
  • Gold

    1,792.50
    -23.00 (-1.27%)
     
  • Silver

    20.27
    -0.42 (-2.04%)
     
  • EUR/USD

    1.0196
    -0.0062 (-0.60%)
     
  • 10-Yr Bond

    2.8490
    0.0000 (0.00%)
     
  • Vix

    20.90
    +0.70 (+3.47%)
     
  • GBP/USD

    1.2071
    -0.0068 (-0.56%)
     
  • USD/JPY

    133.4530
    -0.0270 (-0.02%)
     
  • BTC-USD

    24,178.93
    -510.43 (-2.07%)
     
  • CMC Crypto 200

    573.72
    +2.44 (+0.43%)
     
  • FTSE 100

    7,498.12
    -2.77 (-0.04%)
     
  • Nikkei 225

    28,871.78
    +324.80 (+1.14%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Apple ‘cannot let Amazon get hold of Peloton,’ analyst says

In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Wedbush Analyst Dan Ives joins Yahoo Finance Live to discuss Peloton takeover interest, the outlook for Tesla stock amid supply chain issues, and Meta's sharp value decline after reporting earnings.

Video Transcript

[MUSIC PLAYING]

JARED BLIKRE: Welcome back. Rumors are swirling about Nike and Amazon potentially exploring bids for Peloton. As the company struggles to maintain its pandemic-fueled growth, could Apple be in the mix? Wedbush's analyst-- Wedbush Analyst Dan Ives joins us now to discuss.

And Dan, thanks for-- thanks for coming in here today. Lots of headlines from the weekend, and we know what an execution disaster Peloton has become. But Apple is an interesting twist to this story. Just a theory, it seems like. But what's your case?

DAN IVES: I mean, I think it's more than a theory. I think it comes down to, from a health and fitness perspective, you know, you look at Peloton's unique asset. And I think from Apple, you-- it would be defensive if an Amazon went after it. I mean, they cannot let Amazon get hold of Peloton. But offensively, in terms of fitness, health, Peloton, in terms of the subscription growth and its unique sort of subset into the lives of consumers, that would give them a significant leg up on a lot of their health and exercise initiatives. And if you look for Apple-- I mean, they never thought something like a Peloton would potentially come into their lap. This would be about a quarter-- one quarter free cash flow if they potentially bought this.

BRIAN SOZZI: So Dan, let's say Apple does come in here, they scoop up Peloton. I believe your valuation estimate was $12 billion to $15 billion on Peloton. Does that acquisition help Apple sell more Apple Watches?

DAN IVES: Well, it's all part-- I mean, Brian, it's all part of the ecosystem because you look at Apple Watch, you look at the subscription. That's a big focus in terms of how they're really going to build this into a significant business over the coming years. And you know, I guess some would say, well, Apple could just do it themselves. I mean, why would they have to buy Peloton? I mean, Peloton has a unique technology, unique brand, and I think right now they've sort of hit a brick wall of growth.

I think if you look at Fitbit, GoPro, and what we'll call other successful consumer strategies at one point, their issue is that they never hit the bid. They never went into a broader ecosystem. So of course, a lot of this rests on Foley in terms of on the Peloton side. But for Apple, I think it would be a coup if they ultimately bought this asset.

JARED BLIKRE: All right, and let's get back to the headlines from the weekend. Nike seems to be in the mix, Amazon as well. Does-- How do you think this product-- how do you think Peloton would fit into their product lines and ecosystems?

DAN IVES: Well, it's from a consumer brand. I mean, there's a cross-sell streaming piece, and then also in terms of just exercising subscriptions. That's-- you know, even as the pandemic wanes, that's going to continue to be. That's not going away in terms of the coming years. You know, I think more and more consumers, whatever the-- the mechanism, they want to work out within their houses. Many are going to go back to gyms, but I think it's a multifaceted approach. You look at Nike, you look at Lululemon, and some other sort of areas-- I mean, they could clearly look at a Peloton in terms of-- from a brand and from a subscription service.

But then [? this ?] technology [INAUDIBLE]-- I mean, look at Amazon and Apple. I think that's front and center who would look at this. Now the question is, would they entertain a bid? Are they potentially for sale? You know, and I think right now, just given the activist, given the challenges they have on growth, I view this as a potential acquisition for Apple that would make a ton of sense for a company, since Beats is not a major acquisition. That was $3.2 billion. So I think this is really a very interesting potential asset.

And just lastly, no one cared about Activision. They hated it, right, in terms of investors, except for Satya Nadella and Microsoft when they acquired it. So it just speaks to what we're seeing, a theme in terms of strategic acquisitions in '22.

BRIAN SOZZI: Well, Dan, you essentially think Apple can save Peloton because, for the past year, I mean, Peloton has been an operational nightmare-- just consistent earnings warnings. They overbuilt in terms of capacity. There would be a lot that Apple would have to clean up at the company.

DAN IVES: And I think it would be something that could easily be cleaned up because there's a brand. There's a unique ecosystem. You'll have almost, you know, what could be north of 3 million subscribers, and it's something that they could significantly build into that-- you know, that Peloton [? acquisition ?] [? that ?] could now be within Cupertino.

And I think these are things. I mean, Apple and Cook, they're tacticians, from an execution perspective. But importantly here, if Peloton is not up for bid, Apple is not going to go aggressively after it. It's the fact that, if they opt for a bid, Amazon strategically-- Apple is going to have to do it defensively, in terms of a blockade perspective. And then from an offensive, I mean, this is an asset that would come along every decade or more. And that's why they'd have to go after it.

JARED BLIKRE: And Dan, we have you here. We got some time, and we just want to pick your brains on a couple of other stocks that you follow-- Tesla. If we can pull up the YFi Interactive, this is a year-to-date look. A lot of stocks under pressure, especially-- especially growth stocks. It's down 13%. But I'm going to show you our heat map here.

All of these stocks year to date except for a couple there at the top-- Toyota Motors. Half of these stocks are up 20% or more this year. I'm just wondering how Tesla fits into your equation. I know you have some higher price targets than some of your peers. Just your thinking in general as we emerge, or hopefully emerge, from this environment where growth stocks are just getting absolutely clobbered.

DAN IVES: Look, it is going to be a tough year for growth in terms of a bifurcated tech tape, and I think you've seen that with the likes of Facebook-- I'm sorry, I mean Meta, as well as Netflix. But in terms of Tesla-- I mean, they're going to continue to have to execute in terms of on the supply-chain issues. I think that call definitely made investors nervous in terms of some of the supply-chain challenges. But you look at what's happened in Austin. You look at the profitability in terms of China. That continues to be the core growth story here. I think they ultimately, you know-- this is a valuation that will continue to be a bull-bear debate, but I think they'll prove it again in 2022, continue to be our favorite way to play EVs.

BRIAN SOZZI: Dan, I'm not sure about you, but I'm still recovering from that reaction to Meta earnings all last week. It was just really absolutely jaw-dropping to cover that. You know, as an analyst that-- that has covered tech for a while, what is the aftermath of a report like that? Do you think it will just continue to put, you know, pressure on the broader tech space?

DAN IVES: I think there's some dark days ahead for Facebook-- I mean, Meta, you know, because look, you could change your name every month if you want. Their strategy is ultimately social media and digital advertising. And you look at Apple in terms of the iOS-- that's a gut punch to the Facebook business model, along with TikTok competition. I view it more as isolated rather than necessarily painting tech with the whole brush.

And I think, Brian, that's important. This tape-- I mean, tech, 90%-plus earnings have been beating raises across tech. You can focus on Meta. You can focus on Netflix. You'll see some fall by the wayside. I still think it's the very robust fundamentals when it comes to cybersecurity, cloud, 5G, and even digital advertising. But I mean, Zuckerberg and others-- they have an Everest-like uphill battle to get back to growth.

JARED BLIKRE: And Dan, we got time for one more here. And I'm going to-- I'm going to give you the floor. Any particular ticker or industry group on your mind catching your eye today?

DAN IVES: I think it's cybersecurity. I think probably the most oversold sector that I've seen in years is cybersecurity, just given what we're seeing in terms of the fundamental performance, where we are in terms of the move to the cloud and the heightened risk. I look in names like Zscaler, Palo Alto, Tenable, CyberArk, among others. You know, I think these are-- Cybersecurity is what I put an asterisk around. I think this is going to be a sub-sector that significantly outperforms this year.

JARED BLIKRE: All right, we're going to have to leave it there. Wedbush Securities' own-- Dan Ives, thanks for joining us, as always.