Top analyst revises Apple stock price target amid iPhone 16 debate

Apple shares fell again on Wednesday, nearing their lowest levels in a month, even as a top Wall Street analyst sees an impending “super cycle” of iPhone upgrades linked to the AI ​​push of the technological giant.

Apple (AAPL) shares have been under pressure for most of the past month and have extended declines since the September 10 launch of the iPhone 16 amid concerns that the slow rollout of AI-powered features on the flagship device would reduce demand for new purchases and upgrades -hate. .

Reports of faster delivery times for new iPhone 16 orders, which may be a good proxy for gauging the balance between Apple’s supply plans and consumer demand, also suggested subdued early adoption for the new phones that went on sale general this week and they have prices. largely in line with last year’s models.

Meanwhile, Taiwan-based Apple analyst Ming-Chi Kuo reported earlier this week that Apple sold about 37 million new iPhone 16 units in its opening weekend, down about 12.7% from the first days after last year’s iPhone 15 launch.

Apple’s new iPhone 16 will include new AI-powered features that will roll out in the coming weeks and months.

Demand for the new iPhone series could prove crucial to the broader AI investment thesis, as Apple is seen as the tech group best placed to deliver the new technology at the consumer level through its base of 1.4 billion users.

“when not if” super-cycle

However, Morgan Stanley analyst Erik Woodring believes that iPhone delivery times lack the predictive power that investors sometimes assume and continues to see a large increase in demand in the near term.

“Historically, the first 2 weeks of shipments are directionally predictive of the next 12 months’ shipments at the model level, but they don’t provide much information about December quarter iPhone version revisions or total iPhone shipments,” Woodring said in a published note. Tuesday.

Related: Apple stock slips as iPhone 16 big bet pulverizes

Woodring also reiterated his “buy” rating and $273 price target on Apple stock, a level that suggests a 26% upside for Apple stock over the next 12 months.

“What’s more important is how iPhone 16 delivery times play out over the next 10 days,” he added. “We see a short-term dip in stocks to $200, which we would be buyers of given that the multi-year upgrade cycle is a ‘when, not an if,'” he added.

Evolution or revolution?

CFRA senior equity analyst Angelo Zino also argues that early iPhone times are not a reliable indicator of demand, noting the small sample size and time horizon that could skew the data set.

Zino sees “mid-to-high single-digit percentage growth” in the iPhone 16 and iPhone 17 he says, but believes adoption “will not be a super cycle” but rather “an evolutionary one that will take multiple cycles for to witness the true benefits”. .”

Related: Huawei answers Apple’s iPhone 16 with the first trifold phone

“We’re disappointed by the lack of high-end price changes and limited details on AI’s launch while we wait to see how aggressive the telcos will be with promotions. The event did not provide a major catalyst,” said Zino, who kept his “buy” rating on Apple shares unchanged in a note on Tuesday.

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Apple will report its fiscal fourth-quarter earnings on Oct. 31, with early estimates suggesting revenue of $94.4 billion and earnings of about $1.60 per share.

Shares of Apple were marked 0.38% lower in pre-market trading to indicate an opening price of $215.97 each.

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