Analysts flashed a red flag regarding lukewarm preorders for Apple, Inc.‘s AAPL newest iPhone iteration, but one analyst doubled down on his bullish take on iPhone 16 as it went on sale this weekend.
The Apple Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and $300 price target for Apple shares.
The Apple Thesis: Apple is off to a strong demand start, Ives said, citing Asian supply checks. Although Apple Intelligence will be released in phases over the coming months, this iPhone 16 upgrade cycle will be over 90 million units on initial launch and be up roughly 8 million to 10 million units from iPhone 15, he said. The demand has been tracking well so far, with an estimated 300 million iPhones of the 1.5 billion iPhones not upgrading in four years, he added.
Apple is focused on driving a robust December holiday season for iPhone 16 with many features rolled out over the coming months, Ives said. He estimates that the company can sell more than 240 million iPhone units in fiscal year 2025.
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The analyst sees China as the front and center, as he expects more partnerships on for large-language models around Baidu, Inc. BIDU over the coming months. “That will fill in a missing piece of the AI puzzle in the key China market as OpenAI in its marquee partnership will launch the most sophisticated personal assistant for consumers with ChatGPT fueled by Apple’s new A18 chip,” he said.
The analyst conceded Huawei trifold smartphone could be another disruptive force in the Chinese smartphone market. But Apple with its iPhone 16 upgrades could sell about 50 million units in this region is fiscal year 2025, he said.
The next step to drive installed base in the Apple Intelligence, Ives said. “We believe over 20% of world’s consumer population will ultimately interact with AI through an Apple device over the coming years,” he said.
“This is the beginning of an AI driven iPhone super-cycle that should enable Apple to break its historical mark for iPhone units in a year and translate into a $4 trillion market cap for Cupertino in 2025,” the analyst said.
Apple Stock: Apple ended Friday’s session down 0.29% at $228.20, according to Benzinga Pro data. The stock has, nevertheless, added about 19% so far this year.
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