Apple's Price Target Boosted to $325 by Wedbush: A Bullish Bet on AI-Driven Growth

Apple shares edged higher in early Thursday trading as a longtime bull on the stock suggests its march to a $4 trillion valuation "is still being underestimated by" Wall Street.

Apple (AAPL) shares have risen nearly 10% over the past month, and have added more than $720 billion in market value since their early-August trough, as investors continue to bet that its Apple Intelligence will be the first significant consumer use case for artificial intelligence technologies.

The rollout of Apple Intelligence will take several months, however, and will be fully available only in certain markets, as Apple deals with language, tech and regulatory challenges. That's led to some reluctance from investors to assume that Apple can monetize its AI investment over the coming year. That outlook could also be clouded by fading smartphone demand as consumers tighten their belts in a cooling global economy.

Wedbush analyst Dan Ives, however, argues in a note published Thursday that "many bears and longtime Apple naysayers that have missed the last $1 trillion-plus upward move in market cap for Apple have miscalculated three very important dynamics of the Apple story."

"We believe Apple is on pace to reach the $4 trillion market cap threshold and be the first member of this exclusive club," Ives said.

Ives, who raised his price target on the stock by $25 to $325 a share, says that around 300 million iPhones in circulation are prime for an upgrade to the 15 and 16 versions, which carry the Apple Intelligence features.

Apple's 'unmatched' installed base: analyst Ives

That, alongside its "unmatched" installed base of more than 2 billion devices using the iOS operating system and a services business valued at $2 trillion, offer a compelling case for the group's longer-term prospects.

"Consumer AI 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," Ives said.

"We believe the success of iPhone 16 with a strong holiday season in tow will be the launching pad for a renaissance of growth in Cupertino over the next 12 to 18 months that kicks off in this December quarter."

Related: Analysts revisit Apple stock price targets after earnings, iPhone 16 outlook

Finance chief Luca Maestri said current-quarter sales, a key metric for investors, would likely rise by low- to mid-single digits percent from last year's $119.58 billion.

At the time that forecast disappointed Wall Street analysts, who were looking for an early indication that Apple Intelligence was sparking demand for the newly released iPhone.

AI-driven upgrade cycle

Ives, however, sees Apple shifting "north of 240 million iPhone units" over the group's current fiscal year, which began in October.

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"As this AI-driven upgrade cycle takes hold, this will be the highest iPhone unit sales year in Apple's history," Ives said. "We believe there are 100 million Chinese iPhones in the window of an upgrade opportunity alone for 2025."

Apple shares were marked 0.1% higher in early Thursday trading to change hands at $258.50, a level that would peg the stock's market value at just over $3.91 trillion.

Key Takeaways
Wedbush analysts told clients in a note Thursday that Apple could be headed for a “golden era of growth” in 2025, driven by demand for artificial intelligence (AI).
The analysts raised their price target for Apple's stock by $25 to $325, and maintained an "outperform" rating.
Apple shares have gained over one-third of their value since the start of the year, as the company's market capitalization nears $4 trillion.
Wedbush analysts led by Dan Ives, long an Apple (AAPL) bull, told clients in a note Thursday that the iPhone maker could be headed for a “golden era of growth” in 2025, driven by demand for artificial intelligence (AI).
The analysts raised their price target for Apple's stock by $25 to $325, implying about 26% upside from Thursday's intraday price of $258.25, and maintained an "outperform" rating, anticipating a multi-year iPhone upgrade cycle driven by AI that “is still being underestimated by the Street."
That's a lot higher than the average analyst price target compiled by Visible Alpha at about $244, which would imply a decline from Thursday's intraday level. Just over half or nine of the 15 analysts polled hold "buy" or equivalent ratings for the stock, with four "hold" and two "sell" ratings.
Wedbush's target boost comes as the firm projects Apple could sell more than 240 million iPhones in fiscal year 2025, “as this AI-driven upgrade cycle takes hold and this will be the highest iPhone unit sales year in Apple's history.”
Shares of Apple edged higher to an all-time high, before paring back gains in early trading Thursday. They've gained over one-third of their value since the start of the year, as the company's market capitalization nears $4 trillion.
Wedbush expects Apple could soon reach that $4 trillion threshold, which would make it the first company in the world to do so. At present, there are only three companies with a market caps over $3 trillion, including Apple, Nvidia (NVDA), and Microsoft (MSFT).
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By Steve Gelsi
Wedbush's Daniel Ives higher price target, based on an expected surge in iPhone sales, implies 26% upside
Wedbush technology sector analyst Daniel Ives already had the highest price target for the iPhone maker among Wall Street analysts, but on Thursday he boosted it further on an expected surge in interest in artificial-intelligence-enhanced iPhones.
Apple's stock (AAPL) eased 0.1% to $358.07 on Thursday as trading resumed after the Christmas break. The stock had gained 4.1% amid a four-day win streak to close Tuesday at a record $258.20.
Ives lifted his 12-month price target on Apple stock to $325 a share from $300 a share. The new target implies 26% upside from Tuesday's closing price.
Despite the stock's 34% rise so far in 2024, Ives said Apple remains undervalued because investors don't fully appreciate the growth potential of its AI-enhanced iPhones, Ives said.
"We believe Apple is heading into a multi-year AI driven iPhone upgrade cycle that is still being underestimated by the Street," he said.
Ives reiterated comments he made earlier this week that projected iPhone unit sales of 240 million in fiscal year 2025 for Apple, which would rank it as the highest in its history.
Also read: Apple to see strong Christmas iPhone sales that launch a 'enaissance of growth.
Ives' new stock price target is the highest of the 53 analysts surveyed by FactSet who cover Apple, and is the only one that is above $300. His target is 31% above the average target of $247.58.
He is one of 34 analysts who are recommending investors buy the stock, while only three are bearish and 16 are neutral.
-Steve Gelsi
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Copyright (c) 2024 Dow Jones & Company, Inc.

Key Takeaways
Wedbush analysts told clients in a note Thursday that Apple could be headed for a “golden era of growth” in 2025, driven by demand for artificial intelligence (AI).
The analysts raised their price target for Apple's stock by $25 to $325, and maintained an "outperform" rating.
Apple shares have gained over one-third of their value since the start of the year, as the company's market capitalization nears $4 trillion.
Wedbush analysts led by Dan Ives, long an Apple (AAPL) bull, told clients in a note Thursday that the iPhone maker could be headed for a “golden era of growth” in 2025, driven by demand for artificial intelligence (AI).
The analysts raised their price target for Apple's stock by $25 to $325, implying about 26% upside from Thursday's intraday price of $258.25, and maintained an "outperform" rating, anticipating a multi-year iPhone upgrade cycle driven by AI that “is still being underestimated by the Street."
That's a lot higher than the average analyst price target compiled by Visible Alpha at about $244, which would imply a decline from Thursday's intraday level. Just over half or nine of the 15 analysts polled