Wedbush bullish on Apple (AAPL.US): Strong rebound in China market driven by hot iPhone 16 and AI upgrade wave

Wedbush Securities' latest report said that Apple's (AAPL.US) iPhone 16 sales in China grew 20% YoY in the first three weeks, marking a revival of its growth momentum. The firm's analyst Dan Ives highlighted in a client note that the sales of the high-end Pro and Pro Max models grew 44% YoY from the iPhone 15, which is in line with his recent industry analysis and supply chain checks in Asia. Ives expects Apple's iPhone sales in China to rebound strongly in the next year as the iPhone 16 leads the AI super cycle. Ives maintains an "Outperform" rating on Apple's stock with a target price of $300.

Moreover, Ives also mentioned that Apple may collaborate with China's Baidu (BIDU.US) in the AI field, similar to its cooperation with OpenAI in the United States, which could further drive iPhone upgrades in Asia. He believes that Apple's AI features, coupled with a massive upgrade cycle, are opening a new era of iPhone growth, especially in the key market of China, which has been a drag on Apple's revenue growth in the past year.

Ives expects that there will be 100 million iPhone upgrade opportunities in China alone in 2025. For the entire fiscal 2025, Ives expects Apple's iPhone sales to exceed 240 million units, driven by the AI-driven upgrade cycle.

As of the time of writing, Apple's stock price rose 1.8% in pre-market trading.