Apple is on the cusp of an artificial-intelligence-fueled "golden era of growth," Wedbush analysts argued Thursday as they raised their price target on shares of the tech giant. Others have more worries as the stock approaches a $4 trillion market value.
Wedbush analyst Dan Ives increased his price target to $325, a Wall Street high, and maintained an Outperform rating, just days after reiterating a $300 price target on the stock. Analysts surveyed by FactSet have an average price target of $248.14 on Apple shares. With Apple up 0.1% at $258.39 on Thursday, that is below the stock's recent recent price
"We believe Apple is heading into a multi-year AI-driven iPhone upgrade cycle that is still being underestimated by the Street," Ives wrote, nodding to the Dec. 11 release of Cupertino 18.2, the latest iPhone operating system. The update included features like AI emoji generation and "front and center ChatGPT integration in Siri."
Hundreds of applications still in development will create a multibillion-dollar annual revenue stream, Wedbush asserted. These apps, created "on top of the building blocks of Apple Intelligence," will kick-start "a renaissance of growth in Cupertino over the next 12 to 18 months."
With a services business valued at $2 trillion alone, the analysts argued that Apple was set to surpass the $4 trillion market cap threshold and become "the first member of this exclusive club." Apple's market cap was $3.91 trillion as of Thursday afternoon.
In Wedbush's view, the company was also on pace for a historic upgrade cycle, as an estimated 300 million iPhones haven't been upgraded in more than four years. The firm believes Apple could sell upward of 240 million iPhone units in fiscal 2025, marking the highest sales year in the company's history.
"We believe there are 100 million Chinese iPhones in the window of an upgrade opportunity alone for 2025," the analysts wrote.
New AI offerings will only catalyze the inevitable. "Rome wasn't built in a day and neither will Apple's AI strategy but the seeds of that strategy with Apple Intelligence are now forming and will transform the Apple consumer growth narrative over the coming years," Wedbush wrote.
Not everyone is as enthusiastic about Apple's recent gains. BTIG strategist Johnathan Krinsky notes that Apple stock closed up 2.6% last week, its fifth consecutive weekly gain of 2% or more, the first time that has happened since 2010. That creates "a difficult set-up for January," he wrote, while cautioning that one-month forward returns after such streaks "have been quite negative" for Apple.
"With AAPL once again the world's most valuable company and nearing a 4 trillion dollar market cap, we would be cautious on the stock heading into January," Krinsky advised.
Apple stock climbed 0.32% to $259.02 on Thursday, and is up 34.5% this year. The stock briefly hit a record intraday high of $260.10.