It’s no secret Apple (NASDAQ:AAPL) has had a bit of a tough time of it lately, as questions of growth, or lack of it, and a lackluster iPhone cycle have been depressing sentiment. However, the tech giant’s recent March quarter report came in better-than-anticipated, and according to one Street analyst, there’s some good stuff just around the corner for those waiting for the bull thesis to take flight again.
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It all boils down to two letters: AI. According to Wedbush analyst Daniel Ives, artificial intelligence is poised to be the game-changer moving forward.
“We believe AI technology being introduced into the Apple ecosystem will bring ample monetization opportunities on both the services as well as iPhone/hardware front and adds $30 to $40 per share to the Cupertino growth story as the vision starts to play out within the golden installed base of 2.2 billion iOS devices,” the analyst explained.
Accordingly, Ives rates Apple shares an Outperform (i.e., Buy), while raising his price target from $250 to a Street-high of $275. Should the figure be met, investors will be sitting on returns of ~45% a year from now. (To watch Ives’ track record, click here)
Ives’ positive thesis is based on recent Asia supply chain checks where he is seeing “more signs of iPhone stabilization.” Heading into a “monumental” iPhone 16 upgrade cycle – the new iteration will include exclusive AI features, says Ives – this development is a “very good sign.”
Following the better-than-expected March results, where iPhone growth is concerned, various markets are exhibiting “spots of optimism,” with the analyst taking the view the June quarter will be the “last negative growth quarter for China with a growth turnaround beginning in the September quarter.”
Moreover, over the last week, Taiwan checks made by the Wedbush Tech Team show April results for the Apple supply chain that were “2% ahead of historical linearity while consensus remained unchanged.” The strong performance in April may have been boosted by inventory buildup in anticipation of China’s holidays in May and June, although there has also been a modest increase in Chinese handset production projections for the June quarter, with optimistic expectations for CQ3 builds.
“This adds to our entrenched view that for Apple iPhone builds we will see a lift heading into a highly anticipated iPhone 16 upgrade cycle that kicks off in September,” Ives opined. “We believe current Street numbers are somewhat conservative for FY25 which is good setup into this upcoming iPhone cycle.”
So, that’s the Wedbush view, but what does the rest of the Street have in mind for Apple? With an additional 20 Buys, 11 Holds and 1 Sell, the analyst consensus rates the stock a Moderate Buy. Over the next 12 months, shares are expected to rise by ~8%, considering the average price target stands at $204.77. (See Apple stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
