According to the latest analysis by Wedbush, following a review of the supply chain in Asia, Apple (NASDAQ:AAPL) shows signs of stability in the iPhone market.
The financial advisory firm increased its valuation estimate for Apple shares from $250 to $275 in a report, citing the approaching significant upgrade cycle for iPhone 16 as a positive indicator of this stability.
The firm anticipates that the upcoming iPhone 16, which Wedbush labels a “super cycle,” signals a shift in demand for iPhones towards a growth period driven by artificial intelligence. Wedbush believes that the integration of AI into Apple’s offerings will create significant revenue opportunities in both services and hardware segments. This strategy could potentially increase Apple’s stock value by $30 to $40 as it becomes more widespread among the vast user base of 2.2 billion iOS devices.
Wedbush’s recent checks in Taiwan indicate that Apple’s supply chain performance in April was 2% better than typical expectations for that period, with no change in consensus estimates.
The firm observed that the strong performance in April may have been due to stockpiling in preparation for upcoming holidays in China in May and June. Analysts also noted a slight increase in projected smartphone production in China for the quarter ending in June, along with optimistic forecasts for production in the third calendar quarter.
Wedbush also predicts that Apple will lay the groundwork for an AI-based app store. Developers are expected to create consumer applications using the AI framework that Apple will unveil at its Worldwide Developers Conference in June. This development is anticipated to contribute to the growth of Apple’s Services over the next few years.
Source: investing.com
