Proactive Investors - Analysts at Wedbush have raised their price target on Apple Inc (NASDAQ:AAPL, ETR:APC) and repeated their ‘Outperform’ rating on the stock after the iPhone maker delivered better-than-expected results for the June quarter and a strong outlook.
They raised their price target to $285 from $275, implying upside of about 28% from Apple’s share price on Friday morning.
“The Street was widely expecting a weaker June quarter headlined by soft China performance again.....instead [CEO Tim] Cook & Co. delivered a better-than-expected quarter with beats on the top and bottom lines driven by iPhone and Services along with improving performance in the key China region with growth expected to return in the September quarter,” they wrote in a note to clients.
They highlighted that iPhone demand continues to slowly turn the corner in China, with revenue down 3% in constant currency, while they expect positive growth in the September quarter boosted by “robust” Services performance (up 14% year-over-year).
Analysts also see the launch of the iPhone 16 in September kicking off “an AI-driven supercycle.”
The introduction of AI technology into the Apple ecosystem will bring monetization opportunities for Services and on the hardware side and add $30 to $40 per share, analysts believe.
Apple has started rolling out its new AI features, known as Apple Intelligence, to developers, aiming to significantly enhance app capabilities.
The company is staggering the launch and has partnered with OpenAI to integrate ChatGPT and other features. Apple expects full integration into iPhones and other devices by the end of the year.
“Our view is betting against Cook and Cupertino into an AI-driven supercycle led by iPhone 16 and Apple Intelligence is the wrong move for investors as the renaissance of growth returns to the Apple story,” they wrote.
“Apple remains one of our top tech picks for the year as this quarter/outlook reinforces our thesis that the worst is now behind Apple in the key China region and now the company is on a yellow brick road for positive growth next quarter on the heels of the iPhone 16 launch.”