Big news from Apple today: This catalyst could send the stock higher

Apple (NASDAQ:AAPL) is expected to launch its AI-powered iPhone 16 at It’s Glowtime Event. on September 9 at 10:30 a.m. in its headquarters in Cupertino. This event will be closely watched for several reasons. First, the company is expected to unleash its AI capabilities with this launch, setting a new industry standard in the smartphone market. For Apple investors who like the company to break into new markets and dominate those markets for decades, this is good news.

Given that we’re just hours away from this event, let’s see what the company is expected to announce, what analysts think about the company’s upcoming iPhone launch, and how Apple Intelligence (which will be released for its iPhone, iPad, and Mac products ). ) will affect its future earnings prospects.

indeed Wedbush analysts predict that 300 million iPhone owners haven’t updated their iPhones in over four years. If that’s the case, and this Apple Intelligence integration is enough to get those buyers off the hook, that could mean there’s once again the potential for a massive super cycle in iPhones, with up to 240 million new phones potentially bought by market. .

Let’s look at whether it is possible for these numbers to be remotely accurate.

Key points about this article:

• Apple’s “Glowtime” event today will introduce a new set of iPhone products and highlight the launch of the company’s new Apple Intelligence product.
• Analysts remain optimistic about this upcoming event, which could pave the way for another iPhone super cycle.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

What Goldman Sachs has to say

A Goldman Sachs sign on the wall with the Goldman Sachs stock price and on a TV

Goldman Sachs analysts recently RECORDED that Apple’s iPhone 16 event could lift its stock if unexpected “positive surprises” are revealed. The investment bank suggested those surprises could push the stock toward a target of $276, up 25 percent from Wednesday’s close. Despite this potential, Apple stock has underperformed the S&P 500 by 0.70% on iPhone announcement days since 2019.

There are four potential places where Apple could surprise on the upside, at least according to Goldman Sachs. Analysts believe that a price hike for new iPhones, an earlier release of Apple Intelligence features, new iPad announcements and better-than-expected telecom promotions could be the reasons why this stock is trading higher following this event. Any kind of revenue-boosting price increases, such as increasing the base model’s storage to 256GB from 128GB, for example, could lead to more upside for AAPL stock. In particular, the iPhone Pro hasn’t gone up in price in five years, so that will be a key metric to watch.

Such a price hike may be more likely given that the iPhone 16 will largely be seen as a “next generation” smartphone with its built-in AI capabilities. We’ll have to see if Apple can chart the path to higher smartphone prices and if other companies follow suit. It will all depend on the initial demand for these phones, as indicated by the pre-order activity in the coming weeks.

Apple Finance

A financial statement showing tabulated figures

For third trimester through June 29, 2024, Apple’s net sales rose 4.9% year over year to $85.78 billion. The company’s gross margin rose 9% to $39.68 billion, while operating income rose 10.2% to $25.35 billion. Net income rose 7.9 percent to $21.45 billion, with earnings per share up 11.1 percent to $1.40.

These results highlighted the strength of the company’s existing lineup, and we’ll have to see how this new iPhone and the launch of Apple Intelligence play into the numbers for the coming quarters. The analysts design Apple’s fourth-quarter 2024 revenue will rise 5.2% year-over-year to $94.14 billion, with EPS expected to rise 9.3% to $1.60. Apple has beaten revenue and EPS estimates for the past four quarters. For fiscal 2024, revenue is forecast to grow 1.9% to $390.40 billion, with EPS rising 9.2% to $6.69. In fiscal 2025, revenue and EPS are expected to grow 7.7% and 10.9% to $420.29 billion and $7.42 billion, respectively.

Apple’s revenue has grown at a compound annual growth rate (CAGR) of 8.3% over the past five years, with EBITDA growing 11.5% and free cash flow generating 14%. Net income and EPS grew at CAGRs of 12.9% and 17.4%, respectively. Apple’s trailing 12-month EBIT margin of 31.27% beat the industry average by 539.5%, while its EBITDA margin of 34.18% was 242.4% higher. The company’s net income margin of 26.44% beat the industry average by more than five times, highlighting just how profitable this consumer discretionary stock is.

Should you buy Apple stock right now?

The Apple logo on the side of a corporate office

Some analysts doubt that the iPhone 16 will offer significant enough upgrades to warrant a true iPhone super cycle. Others seem to think that this Apple Intelligence integration could be the catalyst that many investors have been waiting for as a reason for consumers to go out and upgrade their phones. We will see.

Personally, I’ll be upgrading my iPhone no matter what they say at this event (my cracked screen is just not readable anymore, so it’s a “must buy” at least from my point of view). Those who have held on to their phones for years, like myself, may find themselves in a similar boat, and these AI capabilities may just be what drives the decision to “buy” from “hold” for many consumers .

The post Big news from Apple today: This catalyst could send the stock higher appeared first on 24/7 Wall St.