Wall Street Bullish On Apple Ahead Of iPhone 16 Launch, With BoA Being The Newest 'Believer'

Apple's next-generation iPhone is stirring up new bullish sentiment on Wall Street.

Bank of America is the latest bank to raise its price target for the stock, estimating it at $256 per share. This target price implies that Apple's stock could rise by approximately 12.5% from its current level.

The bank emphasizes that the next iPhone upgrade is key to driving up Apple's stock price. BofA believes that consumer excitement about generative artificial intelligence and the obsolescence of currently-held devices will drive a multi-year upgrade cycle.

Citing a survey conducted by the bank, they wrote on Thursday: Post WWDC, the percentage of respondents answering their intention to upgrade their smartphone in 2024 increased, which we view as bullish. In our view, this survey result signals higher confidence in users' purchasing decisions, which could be driven by the introduction of Apple Intelligence.

Other analysts are also optimistic about the upcoming iPhone 16, which is set to be released in September and will be Apple's first device to consider artificial intelligence features. Apple showcased its Apple Intelligence product at the Worldwide Developers Conference held last month, upgrading Siri to a smart digital assistant with more conversational capabilities than the current version.

Dan Ives, an analyst at Wedbush Securities, estimated in a report on Thursday that the new phone's shipments will approach 90 million units, exceeding Wall Street's expectations. The firm has set a price target of $275 for the stock.

However, it should be noted that the features of the iPhone 16 are not the only catalyst. Suppressed demand for the new model is also a reason. Wedbush said that it is estimated that 270 million iPhone users have not upgraded their devices in four years.

BofA also agrees with this view. The bank found in its survey that a large proportion of users are still using older models and that consumers willing to upgrade their phones more frequently have increased. Consumer preference for Apple is higher than for other smartphone brands.

At the same time, the threat of a decline in Chinese consumers' enthusiasm for Apple products, which worried investors a year ago, is diminishing as demand from Chinese consumers for Apple products is also increasing.

At the end of last month, CFRA and Bernstein also raised their price targets for Apple to $240 per share. Angelo Zino, a CFRA analyst, previously had a price target of $210 and said that Apple is preparing to turn the iPhone into the ultimate personal assistant.

Toni Sacconaghi, an analyst at Bernstein, believes that Apple's WWDC keynote made the company a leader in artificial intelligence, with the ability to bring AI to the masses through its installation base of more than 1 billion iPhone users.

Apple can bring AI to the masses, with increasing, everyday utility. It is reportedly not paying ChatGPT, highlighting the power that it holds, he added.

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