iPhone China sales show ‘renaissance of growth has begun’ for Apple: Wedbush

This morning’s report that iPhone 16 sales rose 20% year-over-year in the first three weeks in China suggests a “renaissance of growth has begun” for Apple (NASDAQ:AAPL), Wedbush Securities said.

Shares rose 1.8% in premarket trading.

“We note that both iPhone 16 and Huawei’s new model went on sale September 20th in this key region,” analyst Dan Ives wrote in a note to clients. “The strength from Apple in particular is coming from the higher end Pro and Pro Max as models are up an eye-popping 44% from a year ago iPhone 15 sales. This industry analysis is consistent with our recent Asia trip and supply chain checks that we believe China sales for iPhone 16 will show a strong rebound over the next year with the beginning of this AI driven super cycle led by iPhone 16.”

Ives maintained his Outperform rating and $300 price target on Apple.

In addition to the strong iPhone data, Ives said that Apple is likely to partner with Baidu (BIDU) for artificial intelligence purposes in China, similar to how Apple partnered with OpenAI in the U.S. This could further drive iPhone upgrades in the Asian country, Ives posited.

“Apple launching AI coupled by a massive pent-up upgrade cycle is creating this new era of iPhone growth including in the key China region which has been a drag on the top-line over the past year. We believe there are 100 million Chinese iPhones in the window of an upgrade opportunity alone for 2025.”

Looking at all of fiscal 2025, Ives said Apple could sell more than 240M iPhones “as this AI-driven upgrade cycle takes hold.”