Apple bears have missed out on more than $1 trillion of stock gains, says this bull

MW Apple bears have missed out on more than $1 trillion of stock gains, says this bull

By Ciara Linnane

AI will be a game-changer for the iPhone maker, says Wedbush superbull Dan Ives

Apple Inc.'s skeptics and bears have missed the last more than $1 trillion upward move in the stock by overlooking three key dynamics behind the story, Wedbush analysts said Friday.

Apple $(AAPL)$ has an "unmatched" installed base of more than 2 billion iOS devices and 1.5 billion iPhones, with about 300 million in the window for an upgrade, analysts led by superbull Dan Ives wrote in a Friday note to clients.

The services business is worth $2 trillion which is increasing the monetization of the customer base, said the note. And consumer artificial intelligence "will go through Apple's ecosystem with over 20% of the world's population ultimately interacting with AI on an Apple device the next few years," said the note.

"We believe the success of iPhone 16 with a strong holiday season ahead will be the launching pad for a renaissance of growth in Cupertino over the next 12 to 18 months," the analysts wrote.

Wedbush has an outperform rating on Apple's stock heading into the holiday season and a 12-month price target of $300, that's about 28% above its current price. It's the highest price target among the roughly 52 analysts that cover the stock on FactSet.

Apple unveiled its next-generation iPhone 16 line in early September, and demonstrated some new features using generative AI on the iPhone. Apple Intelligence was released in October for the iPhone 16 and high-end iPhone 15 models via software upgrades available through iOS 18.1.

Ives is expecting iOS 18.2 to be released next week and said demand for iPhone 16 has so far been slightly ahead to generally in line with expectations globally.

"Importantly, Apple Intelligence has not rolled out in China ormany other countries with April the likely timetable for these AI launches along with a Chinese tech partner also named very soon to catalyze the timing of this rollout in this key region," he wrote.

The 18.2 release, meanwhile, will be a significant software upgrade bringing a suite of AI features, including ChatGPT integration, he said. It will also include Visual Intelligence, image playground and other features.

Wedbush is bullish on the stock over a more long-term vista too, predicting a multi-year AI journey that will define the company's future.

The company could sell north of 240 million iPhone units in fiscal 2025 as the cycle takes hold, marking the highest sales of iPhones in Apple's history, said the note.

Apple's stock was slightly higher premarket and has gained 22% in the year to date, while the S&P 500 SPX has gained 25.8%.

That has given the stock a more than $3.5 trillion market valuation, making it the most valuable company in the world.

-Ciara Linnane

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November 29, 2024 08:15 ET (13:15 GMT)

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