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apple Wall Street analysts say AAPL stock could be revalued when the consumer electronics giant releases its rumored AI-powered iPhone this fall.
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JPMorgan analyst Samik Chatterjee said in a client note Thursday that hedge fund investors are starting to warm to Apple stock despite the company’s deteriorating fundamentals in the short term. Ta.
Chatterjee said the recent decline in Apple stock has created a more attractive valuation ahead of what could be a major iPhone upgrade cycle.
“The increased investor appetite is primarily driven by interest in participating in the cyclical upswing associated with the AI-on-device-driven upgrade cycle, and investors’ interest in participating in the cyclical upswing associated with the AI-on-device-driven upgrade cycle,” he said. I’m getting some hints.”
Chatterjee said the iPhone 16, scheduled to be released this fall, will likely have AI features that will attract buyers. That selling point could be similar to the transition to 5G wireless networks that began with the iPhone 12 in late 2020.
Apple stock price target lowered
Apple stock has fallen 9.1% since the beginning of the year. Chatterjee said the company is facing weak demand for hardware and slowing growth in services.
Chatterjee maintained his Overweight rating on Apple stock, but lowered his price target to 210 from 215.
Apple stock rose 4.3% on the stock market that day, closing at 175.04.
He said a reassessment of Apple stock will likely occur well before the actual AI iPhone launch.
Chatterjee believes that a major iPhone upgrade cycle will actually arrive with the iPhone 17 series in late 2025. By then, he says, there will be a broader range of use cases for on-device AI.
Gross profit margin undervalued
Elsewhere on Wall Street, BofA Securities analyst Wamsi Mohan reiterated his buy rating on Apple stock, with a price target of 225.
“In our opinion, TheStreet continues to underestimate Apple’s long-term gross profit potential for both products and services,” Mohan said in a client note. “We expect Apple’s gross margins to increase significantly due to the increased mix of services across its portfolio.”
Follow Patrick Seitz on X (formerly Twitter). @IBD_PSeitz Check out more articles on consumer technology, software, and semiconductor stocks here.
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