Source: Wall Street See, Author: Li Xiaoyin
According to a report by Daiwa, as only the iPhone 15 Pro/Pro Max and updated models can support Apple's AI technology, it is expected to drive consumers to actively upgrade and lead to strong shipments growth, with an annual growth rate of average selling price (ASP) will reach 5%.
AI technology is expected to stimulate a 'replacement wave', with institutions bullish on the prospect of increased sales for Apple.
After the opening of the US stock market today, Apple's stock price rose more than 2%. In terms of news, Morgan Stanley has rated Apple as its preferred stock, with a target price raised from $216 to $273, still an 18.4% increase from last Friday's closing price.
On Monday, Goldman Sachs analyst Erik Woodring released a report stating that Apple Intelligence will be a 'significant catalyst' for Apple's device upgrade cycle, stating:
We previously underestimated the importance of the upcoming upgrade cycle, and the market still underestimates this.
We believe that there will be record levels of suppressed demand released on the iPhone 16 series products later this year. With Apple Intelligence unveiled at WWDC for the first time, we are even more confident that the 2025 fiscal year could be the beginning of a multi-year device upgrade cycle.
Benefiting from AI technology, Woodring expects that Apple's average selling price (ASP) annual growth rate will reach 5%, and total revenue will reach $485 billion by the 2026 fiscal year, with a profit of $8.7, which is 7-9% higher than the consensus expectation.
Within the next two years, nearly 70% of the shipment volume will be new models.
Goldman Sachs believes that the launch of Apple Intelligence technology will stimulate potential 'replacement' demand, thereby opening up a 'multi-year upgrade cycle' and driving strong shipment growth.
According to the report, since only iPhone 15 Pro/Pro Max and updated models can support Apple's AI technology, it is expected to encourage consumers to actively upgrade and promote iPhone ASP (average selling price) growth.
Woodring predicts that Apple's iPhone shipments will exceed 0.5 billion units in the next two years, surpassing the previous high record in 2021-2022. It is expected that the shipments in the 2025 fiscal year will be 0.235 billion units, and 0.262 billion units in the 2026 fiscal year.
Specifically, Goldman Sachs predicts that in the 2025 and 2026 fiscal years, 66-69% of iPhone shipments will be new models, which is 2-6 percentage points higher than that in the 2024 fiscal year and 3 percentage points higher than the peak before the 2022 fiscal year, driving iPhone ASP annual growth of 4-5%.
Woodring said that in addition to AI capabilities, the firm's steadfast belief in the upgrade cycle is also attributed to three previously unprecedented factors: over 1.3 billion installed devices, longer upgrade cycles of an average of 4.8 years, and new technologies accounting for only 8% of iPhone/iPad installs.
In addition, currently only 24% of iPads support the running of Apple Intelligence, which means that iPads may also enter an upgrade cycle.
Just last week, Bank of America analyst Wamsi Mohan and others also released a research report, expecting generative AI to strengthen the willingness to upgrade iPhones this year, bringing strong sales growth and profit margin expansion, and raising Apple's target price from $230 to $256.
Apple unveiled the Apple Intelligence feature at WWDC in June, and the company's stock price reached its first record high of the year. As of last Friday's close, Apple's stock price had risen as much as 17%, surpassing the Nasdaq 100 Index's 7% gain over the same period.
Editor/Lambor