Citigroup Upgrades Apple to 'Buy' at $240, Bets on WWDC25’s AI, Ecosystem Potential

Citigroup has upgraded its rating on Apple Inc. (AAPL) to "Buy," setting a target price of $240, citing underappreciated potential in the company’s upcoming WWDC25 event. The investment bank argues that investor expectations for the June 9 conference—themed "Breakthrough Updates Across Apple Platforms"—are undervalued despite anticipated software upgrades for iPhones, iPads, Macs, and Vision Pro devices. Analysts highlight ecosystem integration, AI-driven services, and user interface innovations as key catalysts for Apple’s long-term growth.

The WWDC25 event is expected to reveal major updates to Apple’s operating systems, including a shift to annual naming conventions. For example, iOS 18 will become iOS 26, macOS 14 will be rebranded as macOS 26, and iPadOS 18 will follow suit. This move aims to emphasize annual innovation over incremental versioning. Additionally, multi-device user interfaces are anticipated to undergo significant redesigns, prioritizing simplicity and visual unity. Notably, these updates will align more closely with Vision Pro’s spatial computing capabilities, underscoring Apple’s strategic focus on immersive technologies.

Citigroup emphasizes Apple’s full-stack ecosystem as its core competitive advantage. The company’s proprietary chip design, seamless hardware-software integration, and a data foundation rooted in 2.35 billion active users position it to dominate the AI-driven device era. Despite delays in AI features like a personalized Siri (now postponed to 2026), analysts argue that Apple’s ability to optimize user experiences through vertical integration remains unmatched. The firm’s control over end-to-end systems allows for synergistic improvements across services, hardware, and software.

A central focus of WWDC25 will be enhancements to Apple Intelligence, the company’s AI platform. Analysts speculate that delayed updates to Siri—originally promised during the iOS 18 cycle—could resurface in the iOS 26 release, though timing remains uncertain. Citigroup also anticipates broader regional expansions for Apple Intelligence and potential partnerships with additional AI models beyond OpenAI, such as Google’s Gemini. These moves aim to diversify the platform’s capabilities and strengthen its appeal across global markets.

The $240 target price reflects Citigroup’s belief that WWDC25’s incremental yet meaningful upgrades will solidify Apple’s position in emerging AI-driven markets. While the event may not deliver immediate revenue gains, analysts view the changes as critical steps to enhance user retention, ecosystem cohesion, and service-based revenue streams. The upgrade contrasts with recent market skepticism over Apple’s delayed AI timelines but aligns with a broader thesis that ecosystem integration remains a key differentiator in the tech sector.

Citigroup’s analysis underscores Apple’s strategic recalibration: shifting investor focus from hardware cycles to software and AI advancements. By prioritizing ecosystem enhancements at WWDC25, Apple aims to counter perceptions of stagnation in its core product lines. The conference is framed as a platform to reassert innovation leadership, leveraging its unique vertical integration and data assets to refine personalized experiences. In an AI-centric world, analysts argue that these iterative improvements will sustain Apple’s premium brand loyalty and long-term value.

Despite near-term headwinds from delayed AI features, Citigroup remains confident in Apple’s long-term trajectory. The firm’s "Buy" rating reflects a conviction that the company’s foundational strengths—coupled with WWDC25’s ecosystem upgrades—will drive sustained relevance in an increasingly technology-driven landscape. The target price signals optimism that these strategic moves will translate into tangible shareholder value over time.

—

Word count: ~600