Apple, Inc. AAPL has been one of the laggards among the Magnificent Seven
stocks since 2023, but a bullish analyst said Sunday the company can soon turn things around.
An Opportunity Amidst Laggard? In 2023, Apple experienced a decline among
the Magnificent Seven stocks, yet recent bullish analysis suggests a potential reversal of fortune.
The Apple Analyst: Wedbush analyst Daniel Ives has an “Outperform”
rating and a $250 price target for Apple shares.
Analyst’s Prediction Revisited: Recent Asia supply chain checks confirm a
“clear stabilization” in demand in China, validating the analyst’s forecast for an iPhone 15 upgrade cycle that
surpasses Street expectations.
Investors reacted negatively to Apple’s quarterly results released in early February, as
the China region reported a year-over-year revenue decline.
The analyst now expects iPhone unit sales of 225 million to 230 million units for this year
and the average selling price of its flagship device to exceed $900, given the product mix shift toward the two
high-end models.
The stock recovery seen since the earnings is due to investors taking stock of the fact
that “AI is coming to Cupertino.” Additionally, they have come to realize that the iPhone guidance is very
conservative and Services business will continue its “rock solid double digit growth.”
Ives expects iPhones to show year-over-year growth during the Lunar New Year holiday period
in China as “some promotions and a stepped up marketing campaign by Apple [have] been very successful in mainland
China.”
“Clearly Apple has a fight on its hands with Huawei and some geopolitical
headwinds, but the reality is with over 200 million active iPhones in China very few consumers are switching out
of the Apple ecosystem and that is the linchpin to our bullish thesis for Apple in China despite Street concerns,”
Ives said.
The analyst also weighed in on Apple’s potential AI foray. “We believe the ‘Super Bowl moment
for Apple’ will be when Cook & Co. finally take the covers off the generative AI technology being worked on in the
labs of Apple Park and introduce it to developers and consumers at WWDC in June followed by the exclusive AI features
we expect to be included on iPhone 16,” he said.
Apple’s game-changing monetization opportunity is to introduce a standalone AI App Store to
developers that lays the groundwork for its AI growth, the analyst said. Incremental revenue from the Services business
around AI will be over $5 billion annually, he said, adding that “[it’s] just the start of this renaissance of growth at
Apple.”
The analyst also expects Vision Pro sales to be at 1 million units in 2025.
AAPL Price Action: Apple ended Friday’s session up 0.41% at $188.95, according
to Benzinga Pro data.
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