Analysts Raise Price Target After Admitting They Were Wrong

Apple missed because of a memory shortage. Analysts raised their price target anyway. This makes perfect sense if you've ever met an analyst.

The memory crunch hurt the quarter. It will hurt guidance. The stock should go down. Instead, some genius in a Bloomberg terminal dungeon decided this was the ideal time to tell clients they're now *more* bullish. Not less. More. The logic here is airtight: thing goes wrong, number goes up. Write that down.

Retail traders are currently refreshing their Robinhood apps wondering why their shares aren't mooning after this "plenty of good" press release dropped. They read "raising price target" and assumed that meant something. It does not. It means an analyst needed to justify their existence this quarter and couldn't think of anything better to write. So they picked a number higher than the last number. Groundbreaking stuff.

The "plenty of good" phrase is doing Olympic-level heavy lifting here. Apple couldn't get enough memory chips to meet demand. Revenue guidance is softer. But sure, plenty of good. There's also plenty of good in a gas station burrito if you squint hard enough and lie to yourself.

Here's what actually happened: Apple said they have a problem. Wall Street heard "buy more Apple." This is the same crowd that thinks a forward P/E ratio means something when the E is a number someone made up in Excel after three Red Bulls and a Xanax.

The memory shortage will continue. Apple will work around it or they won't. The stock will go up or down based on forces that have nothing to do with this headline, this analyst, or this price target. But some intern just earned their bonus by changing one number in a spreadsheet and calling it research.

Congrats to everyone who trades on price targets. Your strategy is f*cking flawless.

Photo by Neil P-A on Unsplash