Wedbush raised the price target on Apple’s (NASDAQ:AAPL) stock to $310 from $270 noting that the iPhone 17 is turning into a real upgrade cycle.
The firm maintained its Outperform rating on the stock.
“We are raising our price target to $310 from $270 based on the early strong demand signs coming out of the iPhone 17 cycle. With iPhone 17 officially going on sale over the weekend we are positively surprised on the demand trajectory with units that now appear to be tracking 10%-15% ahead of iPhone 16 thus far,” said analysts led by Daniel Ives.
The analysts believe supply checks in Asia will result in production increases of roughly 20% for base iPhone 17 and Pro models. The analysts added that new “iPhone Air could be the surprise” of this Apple upgrade cycle based on their store checks over the weekend speaking with Apple customers.
The analysts noted that tracking shipping times, they are seeing particularly strong demand for iPhone 17 Pro models which is a positive sign for Apple.
“Heading into this iPhone 17 cycle we were expecting this upgrade cycle to be a good, but notgreat one. Instead the combination of a pent-up consumer upgrade cycle with our estimates of 315 million of 1.5 billion iPhones globally not upgrading their iPhones in the last 4 years, coupled with some design changes/enhancements have been the magical formula out of the gates,” said Ives and his team.
The analysts believe iPhone unit Street estimates of roughly 230 million for fiscal year 2026 could be conservative and now in the 240 million to 250 million area at this pace.
“China demand will be a linchpin to this Apple iPhone 17 upgrade cycle as the negative growth trends over the last few years will now rebound into positive growth in FY26,” the analysts noted.
While iPhone Air is delayed in China with regulatory approval around the eSIM, we expect this to be resolved over the coming month and be on the shelves in China/online, the analysts added. The analysts said that it is time for Apple to drive growth in China, with domestic competition from Huawei and Xiaomi being a formidable headwind.
“The elephant in the room has been the invisible AI strategy, with the biggest consumer installed base in the world of 2.4 billion iOS devices and 1.5 billion iPhones, the time is now for Apple to accelerate its AI efforts through outside partnerships,” said Ives and his team.
The analysts noted that following the win for Alphabet’s (GOOG) (GOOGL) Google and Apple in Google’s antitrust case, in theory Google is barred from “exclusive deals” for search, but it lays a groundwork for Apple to continue its deal, and they believe it will lead to Apple likely doubling down on an AI-related partnership with Google Gemini by integrating into the iPhone ecosystem.
The analysts believe the AI monetization piece could add $75 to $100 per share to the Apple story over the coming few years.
“We believe no “AI premium” is factored into Apple’s stock at current prices which makes this acompelling large cap tech name to own into year-end and 2026,” said the analysts.