The Apple company. AAPL has been a laggard among Magnificent Seven titles since 2023, but a bullish analyst said Sunday that the company could soon change that.
The Apple analyst: Wedbush Analyst Daniel Ives has an “Outperform” rating and a $250 price target for Apple stock.
The apple thesis: New Asian supply chain controls show “clear stabilizing” demand in China, with iPhone units expected to show “incremental growth,” Ives said in a note. This validates the analyst’s prediction that the iPhone 15 triggers an upgrade cycle that exceeds Street expectations.
Investors reacted negatively to Apple’s quarterly results released in early February, as the China region reported a year-over-year revenue decline.
The analyst now expects iPhone unit sales to be between 225 million and 230 million units this year and that the average selling price of its flagship device will exceed $900, given the shift in product mix towards the two high-end models.
The post-earnings rally in stocks is due to investors waking up to the fact that “artificial intelligence is coming to Cupertino.” Furthermore, they realized that iPhone guidance is very conservative and that the services business will continue its “solid double-digit growth.”
Ives expects iPhones to show year-over-year growth during the Lunar New Year holiday period in China thanks to “some promotions and an intensified marketing campaign from Apple.” [have] was very successful on the continent
China.”
“Clearly Apple has a battle on its hands Huawei and some geopolitical headwinds, but the reality is that with over 200 million active iPhones in China, very few consumers are abandoning the Apple ecosystem and that is the core of our bull thesis for Apple in China, despite Street concerns ,” Ives said.
See also: Everything you need to know about Apple shares
The analyst also weighed in on Apple’s potential foray into artificial intelligence. “We believe Apple’s ‘Super Bowl moment’ will be when Cook & Co. finally discovers the generative AI technology it’s working on in the Apple Park labs and introduces it to developers and consumers at WWDC in June, followed by from the exclusive AI features that we expect to be included in iPhone 16,” he said.
Apple’s game-changing monetization opportunity is to present developers with a self-contained AI App Store that lays the foundation for AI growth, the analyst said. Incremental revenue from the AI services business will exceed $5 billion annually, she said, adding that “[it’s] just the beginning of this renaissance of Apple’s growth.”
The analyst also expects Vision Pro sales to reach 1 million units in 2025.
AAPL Price Action: Apple closed Friday’s session up 0.41% at $188.95, according to Benzinga Pro data.
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