Apple stock was slipping in premarket trading Tuesday, but improving demand for its latest iPhone 16 may get it back to new highs.
Shares of the iPhone maker were down 1.1% to $233.83 in premarket trading Tuesday. It closed up 0.6% on Monday, reflecting a market capitalization of just under $3.6 trillion.
JPMorgan analysts led by Samik Chatterjee said they see demand improvement for the iPhone 16. iPhone average lead times -- a key industry metric measuring the time from when an order is received to when the phone is delivered to the customer -- is now in line with the iPhone 15, Chatterjee wrote in a research note Sunday.
Apple launched the newest version of the iPhone, its best-selling product, on Sept. 9 but concerns about weaker-than-expected demand for the device have lingered. The iPhone 16 left investors waiting more, especially in terms of artificial intelligence features. Apple said the rollout of Apple Intelligence -- its AI software for its products -- in languages other than English will take several months.
While average lead times for the iPhone 16 series have been tracking below the iPhone 15 until the fifth week fter the launch, the lead times are back to tracking in line with iPhone 15 in week 6, providing more reassurance around recovery in demand momentum, Chatterjee said.
Citi analysts said its industry checks suggest about 89 million units of the iPhone 16 will be produced in the second half of the year, falling to about 63 million units in the first half of 2025, still above the 59 million iPhone 15 units produced in the first half of 2024.
Chatterjee rates Apple stock an Overweight with a price target of $265, implying a 12% potential upside to its current share price.
Apple's market value hit a record high on July 16 of just over $3.6 trillion. Shares would have to hit $236.83 -- a 0.148% increase from Monday's closing price -- to beat that record, according to Dow Jones Market Data.
Apple stock is up 23% so far this year, in line with the benchmark S&P 500 index.
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