The No. 1 ‘set and forget’ stock in tech hardware for next year? You guessed it.

Apple Inc. enters 2023 facing manufacturing issues in China, concerns about consumer spending and a slate of long-term projects.

But all that aside, its AAPL stock,
-1.46%
is still Evercore ISI’s best set-it-and-forget choice in the tech-hardware space heading into the new year.

“Although we understand that investors are concerned about the iPhone in the near future
Given the production disruption issues in China, we see any headwinds as temporary and investors should focus on the long-term opportunity,” Evercore’s Amit Daryanani wrote in a note to clients on Friday.

In 2023, the smartphone giant has an opportunity to advance its “moonshot” efforts, he continued.

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“We are sure that Apple is working on AR/VR [augmented reality/virtual reality] products and this will likely be the next major hardware product,” he wrote. “On the software side, Apple is making big strides in advertising and payments that investors are generally underestimating.”

See also: Apple faces risk of ‘perishable demand’ for iPhones, analysts say

In Daryanani’s view, Apple’s plethora of patents and its pattern of recent acquisitions indicate a “high probability” of a new device coming to market in the next six to 12 months. This could be a headset supporting augmented and virtual reality or the famous “Apple Glass”.

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“Conservatively, if the AR offering had a comparable trajectory to the Apple Watch, it could contribute $18.1 billion in revenue and 19 cents of EPS [earnings per share] at scale,” he said.

In payments, Apple’s opportunities include gaining traction with the Tap to Pay initiative on the iPhone, which allows people to turn their phones into payment acceptance devices, and increasing the number of merchants accepting Apple Pay online.

“Apple’s interest in financial services makes a lot of sense because a large part of their digital services strategy revolves around building ‘pick stations’ throughout the ecosystem,” Daryanani wrote of the initiative, which could raise $11.6 billion by fiscal 2026 dollars. , according to his estimates.

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Read: Apple plans huge change due to European legal pressure, report says

Other names Daryanani likes in hardware and networking are Amphenol Corp. APH,
-0.63%,
CDW Corp. CDW,
-1.59%,
Arista Networks Inc. ANET,
-1.53%,
Cisco Systems Inc. ANET,
-1.53%
CSCO,
-0.71%,
Juniper Networks Inc. JNPR,
-1.58%,
Pure Storage Inc. PSTG,
-1.58%
and Vertiv Holdings LLC. VRT,
-0.83%.

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