Apple's AI+iPhone dual-engine drives the future! Receives praise from Wall Street

According to the Zhitong Finance and Economics APP, Apple Inc. (AAPL.US) latest quarterly performance and preliminary outlook for the next quarter have won wide acclaim on Wall Street. Analysts are particularly optimistic about the potential of Apple's next generation iPhone and the company's strategic layout in the field of artificial intelligence.

Wedbush Securities analyst Dan Ives pointed out in an investor report, "Apple's artificial intelligence strategy has been launched. With the gradual introduction of new AI features and partnerships with OpenAI, developers will be able to significantly enhance the functionality of applications." Ives expects Apple to integrate AI features such as ChatGPT into the iPhone and other devices by the end of this year. He further emphasized that introducing AI technology into the Apple ecosystem will bring new profit opportunities for services and hardware, with earnings per share expected to increase by $30 to $40.

Ives reiterated his "outperform" rating on Apple stock and raised his target price from $275 to $285 after the performance announcement.

Bank of America analyst Wamsi Mohan also expressed optimism about Apple's performance. In a report to clients, he wrote, "Apple's performance shows that the trends of the entire product portfolio are improving, with growth accelerating in iPhone, iPad, wearable devices, and regional businesses." Mohan believes that Apple's revenue guidance of $94 billion may be too conservative, especially in terms of services and iPhone business, as the guidance does not take into account the growth potential brought by new models. With the launch of Apple Intelligence, Mohan expects significant increases in sales for the December quarter and fiscal year 2025.

Mohan maintained a "buy" rating on Apple stock with a target price of $256, stating that considering the multi-year iPhone upgrade cycle, margin improvement, and strong cash flow, valuation may be further adjusted upwards.

Citi analyst Atif Malik also raised his target price from $210 to $255, and expressed appreciation for the early developer feedback on the Apple Intelligence feature in the iOS 18 beta released this week, as well as the performance of the Apple management team. He believes that AI technology will drive a significant iPhone upgrade cycle.

Malik pointed out in the report, "Although still in the early stages, our discussions with developers show a very positive response to AI features, especially in terms of notification summaries and reducing distractions." He reiterated a "buy" rating on Apple stock and expects iPhone 17 to bring even greater updates, as consumers and developers need time to recognize the value of AI smartphones and develop corresponding applications.

However, some analysts remain cautious about Apple.

Barclays believes that Apple's performance may improve since September, but due to the high stock price, the upside potential is limited. Given that Apple's P/E ratio has exceeded 30 times, and iPhone 16 may not be sufficient to drive a major upgrade cycle, Barclays has set a target price of $187 per share, expecting the stock price to potentially decline by 16% UBS Global Research analyst David Vogt believes that sales in the Greater China region for the quarter may decline by 6%, which is more pessimistic than market expectations. He has set a target price for Apple at only $190.

In addition, compliance issues with the European Commission's "Digital Markets Act" may also pose some regulatory challenges for Apple