①The use of Apple intelligence could boost iPhone sales.②According to William Power, analyst at Baird, nearly 95% of iPhones worldwide will be upgraded to better utilize Apple intelligence.③Power has raised the target stock price for Apple and anticipates that iPhone sales in the 2025 fiscal year will increase by approximately 20 million units.
Investment bank Baird raised the target stock price for technology giant Apple, stating that their artificial intelligence plan - Apple Intelligence - has the potential to boost iPhone sales.
Baird analyst William Power stated in a report to investors, "We estimate that nearly 95% of iPhones worldwide will need to be upgraded at some point to better utilize Apple Intelligence. Additionally, other Apple devices such as Macs and iPads will also benefit from this."
Power has raised Apple's target price from $200 to $240 per share and maintained an "Outperform" rating for the stock.
As of Thursday's (July 25th) US stock market close, Apple had fallen by 0.48%. On Friday (July 26th) pre-market trading, Apple's stock price had increased slightly. Last week, Apple's stock price hit a new all-time high. Since the release of "Apple Intelligence" at the World Wide Developer's Conference (WWDC) one month ago, Apple's stock prices have continued to rise.
Power noted that the upgrade rate for smartphones from major US mobile carriers AT&T and Verizon has been low in recent years, suggesting that consumers may be waiting for artificial intelligence features to be integrated into smartphones.
Power added that with smartphone upgrade cycles extending by several years, older iPhone models are becoming more common, potentially catalyzing upgrades for over 1 billion iPhone users worldwide.
As a result, Power has raised his expected iPhone sales for the 2025 fiscal year by approximately 20 million units, with estimated revenues of $216.1 billion, representing a 9% year-on-year increase, higher than the general estimate of 6%. Furthermore, Power expects Apple's total revenue for the 2025 fiscal year to reach $418.1 billion, EPS of $7.30, which is higher than the previously forecasted $394.6 billion and $6.73 respectively.
Apple is scheduled to announce its third-quarter fiscal year 2024 results after the close of trading on August 1. Analysts generally anticipate the company's revenue to be $84.12 billion, or $1.33 per share.
Editor/Lambor