There’s a big event slated to take place at Apple (NASDAQ:AAPL) Park and the invites have now been sent out. We’re talking about the launch of the iPhone 16, which will happen on September 9th.
The annual launch of the tech giant’s flagship product is always a big deal, but this one is especially important, says Wedbush analyst Daniel Ives, who thinks it will kick off the “biggest upgrade cycle in its history with AI now on the doorstep.”
Ives’ confidence for this upgrade cycle is based on recent Asia checks that signal the next leg of long-awaited growth for Apple is about to begin.
“We are seeing more indications across the Asia supply chain over the past few weeks this iPhone upgrade cycle could be a historical one setting the stage for a supercycle as currently we estimate roughly 300 million iPhones globally have not upgraded in over 4 years,” Ives went to say.
With AI at the core of this cycle, Ives predicts that Apple could sell over 240 million iPhone units in FY25. Initially, the Street anticipated iPhone 16 shipments in the 80 million to 84 million range, but Ives now expects these numbers to exceed 90 million.
The introduction of AI tech to the vast Apple ecosystem will not only be beneficial to the iPhone and other hardware, but will bring “monetization opportunities” for its Services business.
“We estimate this could result in incremental Services high margin growth annually of $10 billion for Apple as this all kicks in and will be the start of new multi-pronged AI revenue stream that is both hardware and software driven,” Ives explained. The AI boom on the doorstep should translate to an additional $30 to $40 per share, says Ives, and that will take Apple’s market cap beyond the $4 trillion threshold.
All in all, Ives rates Apple shares an Outperform (i.e., Buy), along with a $285 price target, implying the stock will climb ~24% higher over the next year. (To watch Ives’ track record, click here)
Ives isn’t alone in his bullish outlook. Of the 34 recent analyst reviews, the consensus includes 24 Buys, 9 Holds, and 1 Sell, leading to a Moderate Buy rating. Analysts predict an average price target of $247.43, indicating an 8.5% upside in the coming months.”
For the most part, Wall Street agrees with Ives’ call on Apple; among the 34 recent analyst reviews submitted over the past three months, the consensus includes 24 Buys, 9 Holds, and 1 Sell, resulting in a Moderate Buy rating. The analysts expect AAPL to climb ~9% in the months ahead, considering the average target stands at $249. (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.
