BUZZ-Street View: Apple's growth hinges on AI-led ecosystem upgrade

Reuters05-03

** Apple's quarterly results and forecast beat modest expectations on Thursday and CEO Tim Cook said revenue growth would return in the current quarter.

** AAPL rose ~6% to $183.46 in extended trading on Thurs

DEVELOPERS CONFERENCE KEY CATALYST

** J.P.Morgan ("overweight", PT: $225) says AAPL's modest revenue growth forecast not ideal outcome for shares trading at ~26x P/E, but gives visibility into upcoming rev potential

** JPM sees tailwinds from product cycles across devices and says AAPL's commentary suggest AI-driven smartphone upgrade cycle could come sooner than FY26

** Morgan Stanley ("overweight", PT: $216) expects profit, rev growth to re-accelerate into low-to-mid teens next year, with focus now on June developers conference for new features, incl GenAI

** "We are entering the period where Apple historically outperforms/sees multiple expansion, and it's hard not to get more bullish here"

** D.A. Davidson ("neutral", PT: $200) says developers conference may be one of AAPL's most important events, expects meaningful announcements on AI across its ecosystem, helping catalyze major upgrade cycle in products such as iPhone

** Piper Sandler ("neutral", PT: $190) though says, "fundamentally we would like to see further improvements in iPhone trends before getting involved"

** UBS ("neutral", PT: $190) says Apple's results were not as bad as feared but inflection is not there yet

(Reporting by Roshan Abraham)

((Roshan.Abraham@thomsonreuters.com))

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