Apple expected to report ‘good headline numbers’ says Wedbush, commentary on iPhone 17 to watch out for

Wedbush maintained its Outperform rating and $270 price target on Apple’s (NASDAQ:AAPL) stock ahead of the company’s fiscal fourth quarter results on Thursday.

Analysts led by Daniel Ives said the Street will be focused on Cupertino delivering good headline numbers with a mini rebound in China iPhone sales front and center.

The analysts said their Asia checks have shown stable iPhone demand globally this quarter, with some improvement in the China market, which is a key theme for Apple as this core region has been a persistent growth headwind over the past year, with domestic smartphone competition heating up.

In addition, the analysts expect a strong Services number that shows upside this quarter and continues to hold up very firm.

“This quarter is just the appetizer for the main event which is the launch of iPhone 17 in September as the Street will be laser focused on the outlook and demand commentary from Cook on the call, said the analysts.

Ives and his team said they would expect iPhone 17 to result in accelerated iPhone unit growth as pent-up demand from the global installed base takes hold. The analysts estimate that about 20% of the 1.5 billion iPhones worldwide have not been upgraded in over four years.

“That said, the “elephant in the room” continues to be Apple’s AI growth strategy which right now is invisible while the rest of the tech world is laser focused on monetizing the biggest tech theme in 40 years….the AI Revolution,” said Ives and his team.

The analysts noted that it is becoming clear that any innovation around AI at Apple is not coming from inside the walls of Apple Park. Importantly for the Street, the analysts estimate that the AI monetization strategy at Apple could be worth up to $75 per share, and “time is ticking for Cook to figure this out.”

“Covering Apple for many years we understand the DNA well in Cupertino and there is a belief they can develop anything internally better at Apple Park that an outside acquisition will give them; unfortunately we believe those days are gone….the time has come Apple needs to acquire Perplexity to significantly boost its AI platform. Perplexity is the “no brainer” deal to help launch Apple’s AI strategy,” said the analysts.

Apple needs to start making some significant headway on its AI strategy because patience is wearing thin among investors, and importantly, developers, according to the analysts.

The analysts believe Tim Cook will be CEO of Apple for at least another five years but right now between the tariff iPhone quagmire, Trump tension around India supply chain, and missing the AI foundational strategy, “this chapter will define Cook’s legacy.”

“It’s time for Cook and Cupertino to face the new reality of this quickly morphing AI driven techlandscape….because if they do not change it will be a historic strategic black eye for Apple in our view,” said Ives and his team.