Proactive Investors - Analysts at Wedbush have raised their price target on Apple Inc (NASDAQ:AAPL, ETR:APC) on their belief that iPhone demand is turning a corner with an “AI-driven iPhone 16 supercycle” on the horizon.
They raised their price target on the stock from $250 to $275 and awarded it an 'Outperform' rating.
Shares of Apple traded hands at $190 on Friday morning.
The analysts noted that there have been more signs of iPhone stabilization based on their recent Asia supply checks, which showed April results for the Apple supply chain were 2% ahead of their historical linearity.
“We believe after a better-than-expected March quarter, spots of optimism for iPhone growth are forming in various markets and ultimately we now believe June will be the last negative growth quarter for China with a growth turnaround beginning in the September quarter,” they wrote.
The analysts also highlighted Apple’s upcoming annual Worldwide Developers Conference (WWDC) on June 10, which they believe marks Apple’s most important event in a decade.
“Introducing AI to its all-important developer community and laying the foundation for bringing generative AI to the consumer starts with Apple in our view,” they wrote.
They expect the formal announcement of a flagship partnership with OpenAI which will consist of an OpenAI chatbot with exclusive features that build upon on-device Apple large language models and cloud-powered Apple large language models along with Apple powering AI on its own high-end chips.
They also expect Apple to lay the foundation for an AI App store as developers build consumer apps on the AI stack which will be introduced at the event, which will lead to additional Services growth over the coming years.
The upcoming iPhone 16 is also expected to include exclusive AI features that set up for “a renaissance of growth that will spark a massive overdue upgrade cycle into 2025,” the analysts believe.
“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,” they wrote.