Apple’s stock has shown robust performance following the Worldwide Developers Conference (WWDC) earlier this month, outpacing the broader market as analysts express optimism about its future prospects, particularly in artificial intelligence (AI).
Since the close of June 7, just before WWDC commenced, Apple shares have risen by 5.7%, compared to a 1.9% increase in the S&P 500 over the same period, according to Dow Jones Market Data. The WWDC, held from June 10 to June 14, served as a platform for Apple to unveil its highly anticipated artificial-intelligence strategy, known as Apple Intelligence.
In response to Apple’s strategic announcements, analysts at Evercore ISI, led by Amit Daryanani, raised their price target for Apple stock from $220 to $250 and reiterated an Outperform rating on Tuesday. The analyst team also revised their estimates for fiscal 2025 iPhone revenue growth, expecting it to increase to 7% from a previous estimate of 4%.
Evercore ISI’s analysts highlighted Apple’s decision to initially limit Apple Intelligence features to the iPhone 15 Pro or the upcoming iPhone 16 lineup as a strategic move likely to drive strong demand for these new models. They anticipate that if Apple successfully delivers on the showcased AI capabilities, it could shorten the replacement cycle for iPhones. This accelerated upgrade cycle could potentially induce owners of iPhone 13/14 Pro and upcoming iPhone 15 models to upgrade sooner than they otherwise would, boosting demand and revenue.
The analysts’ bullish outlook contrasts with the consensus on Wall Street, which currently predicts 3% iPhone growth for fiscal 2025. Evercore ISI sees a pathway to double-digit growth, estimating that even a modest one-month reduction in the replacement cycle could add approximately $14 billion in iPhone sales, equivalent to about 7% of the current estimated revenue for iPhones in fiscal 2025.
Meanwhile, Maxim Group analyst Tom Forte also raised his price target for Apple stock, increasing it from $178 to $195, while maintaining a Hold rating. Forte shares the view that Apple’s AI strategy has significant potential to enhance the company’s market position and financial performance.
As of the latest trading updates, Apple’s stock was trading at $209.91, reflecting a 0.9% increase on the day, while the broader market, represented by the S&P 500, saw a more modest 0.2% gain. Year-to-date, Apple shares have appreciated by 9.1%, indicating strong investor confidence in the company’s future growth prospects driven by innovations like Apple Intelligence.
Overall, the positive sentiment from analysts underscores the belief that Apple’s strategic initiatives, particularly in AI, could drive sustained growth and enhance shareholder value in the coming quarters. Investors continue to monitor developments closely as Apple prepares to roll out its latest innovations and products.
Discover more from The UBJ - United Business Journal
Subscribe to get the latest posts sent to your email.