Apple's AI Ambitions and Potential $4 Trillion Valuation: Analysts Weigh In

Apple Analyst Says 'Historic' Upgrade Cycle Will Push Valuation Past $4 Trillion As Cupertino Sets Date For AI-Enabled iPhone Launch - Apple (NASDAQ:AAPL)

He estimates that monetization opportunities on services as well as iPhone/hardware front could add another $30-$40 per share. Close on the heels of Apple, Inc. AAPL sending out invites for its Sept. 9 iPhone 16 launch event, an analyst at Wedbush maintained an Outperform rating and $285 price target for the stock. Biggest Upgrade Cycle: The launch of the artificial intelligence technology-enabled iPhone 16 in Apple Park will set in motion Apple's biggest upgrade cycle in history, said analyst Daniel Ives. "AI is on the doorstep," he said. "Our recent Asia checks are giving us more confidence this upgrade cycle will unleash a long-awaited renaissance of growth for Cupertino over the next year," he said. Asia supply chain checks over the past few weeks showed that this iPhone upgrade cycle could be a historical one, setting the stage for a supercycle, Ives said. The analyst estimates initial iPhone 16 shipments to be over 90 million, ahead of the 80 million to 84 million the street is shooting for. The company can sell more than 240 million iPhones in 2025, as the AI-driven upgrade cycle takes hold, he said. China, the analyst said, will be the "linchpin of growth," with the region expected to see improvement in growth following the iPhone 16 launch and heading into 2025. See Also: How To Buy Apple (AAPL) Stock Gatekeeper Of Consumer AI: With Apple intelligence coming to iPhones, the Street will slowly recognize that Cupertino will be the gatekeeper of the consumer AI revolution, Ives said. The next step is developers and other technology stalwarts integrating their AI models/technology into Apple Intelligence, given the company holds the keys to the 2.2 billion iOS devices worldwide and 1.5 billion iPhones, he said. "We expect developers over the next 6 to 12 months will build hundreds of generative AI-driven apps that will be key ingredients in the recipe for success for Apple as its technology stack creates the core building blocks of the consumer AI tidal wave we see coming starting with iPhone 16," he added. The analyst said he sees incremental high-margin revenue in the order of $10 billion annually for Apple. The monetization opportunities on both the services as well as iPhone/hardware front could add another $30-$40 per share, propelling Apple's market cap to over $4 trillion, according to the analyst. Maestri Passes Baton: Ives also commented on longtime CFO Luca Maestri's exit, with the veteran leaving the role on Jan. 1. He would lead the corporate service teams, including information systems/security and real estate/development and would report to CEO Tim Cook. Kevan Parekh, an Apple finance/FP&A veteran of 11 years will take over as CFO. Ives said he expects a very smooth transition as he takes the baton from Maestri. "Parekh is an Apple insider that has been trained for this role over the years and we expect a seamless CFO transition in Cupertino," he said. In premarket trading on Tuesday, Apple shares fell 0.52% to $226, according to Benzinga Pro data. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: An Apple/Tesla Robot War? Gurman Says Cupertino Is Making A Big Push Into Robotics Image via Shutterstock Market News and Data brought to you by Benzinga APIs

Apple's AI bid could add $4 trillion to its market cap, analysts say

Apple's foray into artificial intelligence could have a major payoff for the iPhone maker, somewhere in the range of $4 trillion. In June, Apple finally unveiled its AI initiative, known as Apple Intelligence -- a set of AI-powered features for Safari, Notes, Calculator, and, most notably, Siri for the iOS 18, iPadOS 18, and macOS Sequoia. At its annual event, held at the company's Apple Park headquarters on Sept. 9, the tech giant is expected to unveil its iPhone 16 models, which will come loaded with the latest operating software capable of supporting Apple Intelligence. Wedbush analysts, led by Dan Ives, said in a report Tuesday this will mark the beginning of the "consumer AI revolution." "We expect developers over the next 6 to 12 months will build hundreds of generative AI driven apps that will be key ingredients in the recipe for success for Apple as its technology stack creates the core building blocks of the consumer AI tidal wave we see coming starting with iPhone 16," Ives said. The AI technology being introduced into Apple's offerings could add between $30 to $40 per share, resulting in more than $4 trillion in added market capitalization, he said. Apple shares closed Monday at $227.18 apiece, bringing the Cupertino, California-based firm's market cap to $3.45 trillion. Apple announced after market close Monday that its chief finance officer, Luca Maestri, will be stepping down from the role at the start of next year. He will be succeeded by Kevan Parekh, who currently serves as Apple's vice president of financial planning and analysis, and has been at the company for 11 years already. Ives said he expects "a very smooth transition" as Parekh takes over the company's top finance role on Jan. 1. "Parekh is an Apple insider that has been trained for this role over the years and we expect a seamless CFO transition in Cupertino," he wrote. 90 million+: The number of expected initial iPhone 16 shipments, compared with 80-84 million expected by Wall Street. 240 million+: Projected iPhone sales in the 2025 fiscal year, thanks to the AI-driven upgrade cycle.