Proactive Investors - After the Apple Inc (NASDAQ:AAPL, ETR:APC) results last week exceeded expectations, analysts at Wedbush cited reasons for more optimism about the company's growth potential despite "doomsday" predictions from parts of Wall Street.
With the release of new iPads expected soon, attention is now turning to the Cupertino company's strategic plans involving the upcoming iPhone 16 with the June quarter expected to be "the end of this growth doldrums period" and the start of "a renaissance of growth" heading into the September quarter and 2025.
The company is preparing for an AI-driven product cycle, which will be discussed further at the annual Worldwide Developers Conference (WWDC) event where it unveils the latest software advancements, development tools, and product strategies.
"While some patience is required to navigate this China weakness, we believe the seeds for an Apple growth turnaround are being planted in the field by [CEO Tim] Cook & Co.
"We also believe Apple will incorporate generative AI into iPhone 16 and this will mark the start of a new frontier of growth for the golden installed base of Cupertino," the Wedbush analysts said, predicting an "aggressive and no holds barred strategy" around making sure Apple monetizes AI technology.
They predict pent-up demand for phone upgrades could exceed 270 million units heading into the iPhone 16 release, while Apple's service offerings are expected to continue providing double-digit growth.
Wedbush reiterated its 'outperform' rating and maintaining a $250 share price target, citing the tech titan's strong installed base, a forthcoming $110 billion buyback program and "hittable" estimates for upcoming quarters.
The brokerage believes the "worst is in the rearview mirror" for Apple.