Apple's iPhone 16 Launch: Mixed Analyst Reactions and Stock Performance

Analyst revisits Apple stock price target after iPhone 16 launch

Apple shares moved lower in early Tuesday trading following an underwhelming iPhone 16 launch event that included the first look at some of the new AI features it plans to roll out over the coming months. Apple (AAPL) , which had fallen behind some of its big tech rivals earlier this year in terms of generating interest from its AI investments, is now seen as the best-placed company to deliver the new technology at the consumer-facing level through its 1.4 billion installed base of iPhones. Launching the latest generation of its signature smartphone, the iPhone 16, at its global headquarters in Cupertino, Calif. yesterday, Apple touted the infusion of its own AI, dubbed Apple Intelligence, into a host of new products, including its flagship smartphone. "The next generation of iPhone has been designed for Apple Intelligence from the ground up," said CEO Tim Cook. "It marks the beginning of an exciting new era." The new iPhones will go on sale next week, and Apple is hoping the new AI-powered features will both trigger an upgrade cycle that spurs new phone purchases and see-off the burgeoning challenges of Asia-based competitors such as Samsung and Huawei. Weakening iPhone sales It's also looking to infuse interest in the iPhone, which comprises around half of its annual revenues, following a long stretch of weakening sales. Apple said iPhone revenues slipped 1% from last year to $39.3 billion over the three months ending in June, while China sales were down 6.5% to $14.73 billion. "The iPhone 16 range is hugely important for Apple at a time when consumer demand for new smartphones is slowing," said Ben Wood, chief analyst and CMO at CCS Insight. "The range is the first to support Apple Intelligence across the board, which will be central to the next decade of the iPhone." That could help explain why Apple made no major price changes to its iPhone 16 lineup, which includes new camera features, a bigger display, longer battery life and AI functionality that will roll out in beta version next month, with upgrades over the following months. "We were disappointed by the lack of high-end pricing changes and limited AI roll-out details while we await how aggressive telcos will be with promotions," said CFRA analyst Angelo Zino, who nonetheless held his 'buy' rating on Apple stock in place. Others, however, touted Apple's move to use the iPhone as springboard from which to deliver AI technologies to the consumer. "The stamp of artificial intelligence was all over the new iPhone," said Forrester's vice president and principal analyst Dipanjan Chatterjee, who nonetheless noted that the "lack of clarity on a timeline (for AI rollouts) will pour cold water on an upgrade hypercycle for the iPhone 16." Trade-ins could be key Chris Versace, TheStreet Pro's lead analyst, thinks trade-ins could spark some of that upgrade cycle, as it "helps reduce the cost of new device ownership" and "should also help seed the addressable market for Apple Intelligence and corresponding subscription service offerings." Apple has said the new iPhone lineup will range from $799 for the iPhone 16 to $1,199 for the iPhone Pro Max. Related: Apple's new iPhones are built for AI Wedbush analyst Dan Ives, a longtime Apple bull, was more optimistic on the impact of Apple Intelligence on iPhone sales, however, and lifted his price target by $15, to $300 per share, following last night's 'Glowtime' event. "The new era of personalization and how consumers interact with their iPhones has now begun and we believe this will cause a renaissance of iPhone growth (high-single-digit growth upside) for Apple over the next 12 to 18 months and drive shares higher with a $4 trillion market cap in 2025," Ives said. "We are continuing to see further indications across the Asia supply chain that this iPhone upgrade cycle could be a historical one setting the stage for a supercycle as currently we estimate roughly 300 million iPhones globally have not upgraded in over 4 years," he added. "In our view, Apple could sell north of 240 million iPhone units in FY25 as this AI-driven upgrade cycle takes hold." AI paradigm shift Deepwater Asset Management analyst Gene Munster, meanwhile, notes that Wall Street currently sees iPhone sales growing by around 5% or 6% in Apple's next fiscal year, which begins next month, and calls the launch of Apple Intelligence as a "paradigm shift" for the smartphone market. "The functionality that people are going to use, the paradigm shift that I'm talking about is going to be available in October and November for U.S. users," Munster told CNBC. "And that will be free if you upgrade your phone, your hardware, your mac or your iPad." Related: Analyst resets Apple stock forecast ahead of crucial rollout Ultimately, Munster argues, Apple will be able to use a tiered pricing model that it can use to offer products, including a premium version of OpenAI, that they can take a share of revenue from. "The timing and pricing of Apple's new products is noise," Munster said. "What matters is we are entering into an AI paradigm shift in which only Apple can provide a unique consumer experience." More AI Stocks: Apple shares were marked 1.15% lower in premarket trading to indicate an opening bell price of $218.38 each. A portion of that decline, however, is likely tied to news that Apple has finally lost a years-long battle with the European Union over a $14.4 billion tax bill it owes to the Republic of Ireland. Related: Veteran fund manager sees world of pain coming for stocks

Apple Analysts Mixed After Glowtime Event: iPhone 16 Could 'Drive Upgrades,' But 'Next Year Will Be Better' - Apple (NASDAQ:AAPL)

Apple shares details on the iPhone 16 during a company event Monday. Apple Inc AAPL analysts saw limited details on Apple Intelligence and came away mostly mixed or negative from the Glowtime event held Monday. The Apple Analysts: Bank of America analyst Wamsi Mohan reiterated a Buy rating with a $256 price target. Needham analyst Laura Martin reiterated a Buy rating with a $260 price target. Wedbush analyst Dan Ives reiterated an Outperform rating and raised the price target from $285 to $300. Oppenheimer analyst Martin Yang reiterated an Outperform rating with a $250 price target. Piper Sandler analyst Matt Farrell maintained a Neutral rating with a $225 price target. KeyBanc analyst Brandon Nispel maintained a Sector Weight rating with no price target. Morgan Stanley analyst Erik Woodring reiterated an Overweight rating with a $273 price target. JPMorgan analyst Samik Chatterjee reiterated an Overweight rating with a $265 price target. Bank of America on AAPL: Healthcare features, safety and convenience were highlights from Apple's event for Mohan. "Devices will drive upgrades and bring new users to ecosystem," Mohan said. The analyst said the new devices and increased functionality could help Apple expand its reach. "Pricing remained unchanged and may help Apple sell more phones and also help in getting more users to upgrade in order to take advantage of Apple Intelligence." Needham on AAPL: The Apple event may lead to consumers waiting to buy a new iPhone, Martin said in a new investor note. "With lots of words like 'later this year' and 'early next year,' the core AAPL message for iPhone 16 was: Next year will be better," Martin said. While Martin doesn't see Apple showing compelling reasons for consumers to buy new iPhones, the new Apple Watch and AirPod updates could see the opposite. "We believe that the Watch and AirPod health-related updates (sleep apnea, hearing aids, etc.) will drive new sales of those devices, which should lock consumer into the AAPL ecosystem while they await a better iPhone." Wedbush on AAPL: The iPhone 16 could be the "start of an AI-driven era," Ives said in a new investor note. "Apple launched iPhone 16 which we believe will be the most successful iPhone unit launch in its history as Apple Intelligence will be the launching pad for the consumer AI Revolution globally," Ives said. The analyst said the careful rollout of Apple Intelligence could be the right strategy to help with a "major upgrade opportunity" for Apple's users. "We expect more partnerships on the China front for LLM around Baidu over the coming months that will fill in a missing piece of the AI puzzle in the key China market." Ives said the new iPhones and the new ways for consumers to interact with their smartphones will help with iPhone growth for Apple in the next 12 to 18 months. Ives said the iPhone upgrade cycle could push Apple to a $4 trillion market capitalization. Oppenheimer on AAPL: Upgrades to the iPhone may be more incremental than upgrades for accessories and other products, Yang said in a new investor note. "We came away more impressed with meaningful upgrades coming to accessories than iPhones this year," Yang said. "Both Apple Watch and AirPods are getting hardware redesigns that dramatically improve user experience." The analyst said iPhone users upgrading their smartphones could accelerate more in calendar year 2025 with Apple Intelligence fully rolled out around the world. Piper Sandler on AAPL: The Apple Glowtime event went largely as expected, Farrell said in a new investor note. The analyst said camera control, stable pricing and health-focused features were all highlights for Apple products during the event. Negatives from the event could be the staggered Apple Intelligence roll-out and limited education on Apple Intelligence use cases. "Our stance remains unchanged, with the stock already pricing in the 'super cycle' excitement at current levels," Farrell said. The analyst said pricing being consistent with previous iPhone upgrades could help with discretionary spending showing signs of weakness. KeyBanc on AAPL: Apple's Glowtime event provided updates on devices and new features, but went off with limited surprises, Nispel said. "We see the September event as a modest negative for AAPL given a lack of positive surprises and slightly less aggressive promotions from Carriers," Nispel said. The analyst said announcements and pricing was in line with expectations. Apple may rely on order volume growth and see less benefits from average sale prices, the analyst added. For Apple's earnings results, the analyst sees the company having a benefit in the fourth quarter with 12.5% more time for pre-orders and 22% more time for shipping versus the prior year. Morgan Stanley on AAPL: After Apple's Glowtime event, attention turns to pre-orders and lead times for the iPhone 16, Woodring said in a new investor note. "Apple Intelligence driven multi-year device upgrade thesis intact," Woodring said. "Apple Intelligence language expansion timing the most important announcement today." The analyst is lowering average sale prices for the iPhone with Apple not eliminating low-end iPhone 16s as some expected. JPMorgan on AAPL: A larger focus on iPhone features outside of just Apple Intelligence was the key highlight from the event for Chatterjee. The analyst said the key takeaways are Apple Intelligence being rolled out in October, upgrades to camera capabilities and pricing. "Pricing being maintained across the board helps expand the addressable demographic and compares favorably to competing AI smartphones in the market, which have typically boasted price increases with introduction of AI features," Chatterjee said. The analyst said the next catalyst for Apple will be order momentum for the iPhone 16 with the Glowtime event failing to be a positive catalyst. AAPL Price Action: Apple stock is down 1.12% to $218.44 on Tuesday versus a 52-week trading range of $164.08 to $237.23. Apple stock is up 18% year-to-date in 2024. Read Next: * What's Going On With Palantir Stock? Photo: Apple iPhone 16 with Apple Intelligence, courtesy Apple Market News and Data brought to you by Benzinga APIs

Apple Stock Hits 4-Week Low After iPhone 16 Launch; Analyst Previously Noted 30-60 Day Recovery Trend - Apple (NASDAQ:AAPL)

Analyst Wamsi Mohan sees Apple beginning a multi-year upgrade cycle, driven by new AI features like "Apple Intelligence." Apple Inc. AAPL saw its stock dip to its lowest level in four weeks on Monday, falling 1.4% to $218 a share by 3:00 p.m. ET, following the much-anticipated unveiling of the iPhone 16 series at Apple Park in Cupertino, California. Despite the unveiling of multiple new products, including the iPhone 16, Apple Watch Series 10, and updated AirPods, investor immediate response was tepid, in line with past episodes. Last week, Bank of America analyst Wamsi Mohan noted, "Past events have seen the stock pull back after the event, only to recover 30-60 days post event." iPhone 16 Pricing: iPhone 16: Starts at $799 iPhone 16 Plus: Starts at $899 iPhone 16 Pro: Starts at $999 iPhone 16 Pro Max: Starts at $1,199 Apple Watch Series 10 Pricing: Apple Watch Series 10: Starts at $399 Apple Watch Ultra 2 Pricing: Apple Watch Ultra 2: Starts at $799 AirPods Pricing: AirPods 4: $129 AirPods 4 with Active Noise Cancellation: $179 Chart: Apple Dips On Apple Event New iPhone 16 Features The iPhone 16 features a new A18 Bionic chipset, which improves processing power and energy efficiency. It also integrates a new Action Button, providing customizable shortcuts, and dynamic island notifications that were introduced in last year's models. The device is powered by iOS 18, allowing for deeper customization and enhanced privacy features. The Pro versions come with larger 6.3-inch and 6.9-inch displays, thinner bezels, and new colors, including a "desert titanium" option. Additionally, the iPhone 16 Pro boasts improved camera technology, including a 48MP primary sensor and 4K 120fps slow-motion video recording. The Pro models also feature the A18 Pro chip, an even more powerful processor than the standard A18, designed to handle more resource-intensive applications, including advanced photography and gaming. Apple's emphasis on artificial intelligence was a key talking point during the event. Dubbed "Apple Intelligence," the new AI system is integrated into the iPhone 16 models, aiming to enhance the capabilities of Siri by making it more contextually aware and personal for users. Craig Federighi, Apple's senior vice president of Software Engineering, highlighted the role of Apple Intelligence in shaping a more intuitive user experience, stating that the AI-powered system "marks the start of a new era for Siri, with richer language understanding and personalized interactions." 'A Multi-Year Software Driven Upgrade Cycle' Ahead of Monday's unveiling, analyst Mohan offered a more optimistic perspective in a Sept. 5 note, suggesting that the market's immediate reaction may not reflect the company's long-term potential. Mohan highlighted historical data showing that Apple's stock typically performs well 30 to 60 days after a major product launch, despite often seeing a pullback immediately following the event. This has been the case with most iPhone releases, where investors initially react to the incremental nature of the updates, only for the stock to rebound once actual sales data starts rolling in. Mohan pointed out that the strongest post-launch rally occurred after the iPhone 11 series debut in 2019, when Apple shares surged by 20% within 60 days of the event. He emphasized that Apple's iPhone 16 launch marks the beginning of what could be "a multi-year software-driven upgrade cycle," underpinned by the integration of advanced features like Apple Intelligence, which could fuel long-term growth. Mohan also noted that the shipment timeline for the iPhone 16 mirrors that of last year's iPhone 15 launch, with nine shipping days expected in the current fiscal quarter, giving Apple a small but significant window to report initial sales figures for the new models. Bank of America maintained a Buy rating on Apple with a price target of $256, implying an 18% upside from current levels. Read Next: EXCLUSIVE: Small Caps At 'Most Attractive Relative Valuations' Since 1990s, Says Russell Investments' Paul Eitelman Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

What's Going On With Apple Stock Following iPhone 16 Release? - Apple (NASDAQ:AAPL)

The Court of Justice of the European Union upholds the decision that Ireland should recover up to $14.4 billion in back taxes from Apple. Apple, Inc. AAPL shares are trading slightly lower Tuesday after the company unveiled its iPhone 16 models and wearable devices line-up at a launch event on Monday. The Details: Apple introduced the iPhone 16 series, which is "designed for Apple Intelligence from the ground up," according to CEO Tim Cook. As expected, the base model iPhone 16 is priced at $799 and the iPhone 16 Pro is priced from $999, while the iPhone 16 Pro Max starts at $1,199 for the 256GB model. Apple also introduced its latest lineup of AirPods and its Apple Watch at the "It's Glowtime" event. Read Next: Oracle Stock Climbs On Strong Q1 Results, Partnerships With Google Cloud, AWS Wedbush analyst Dan Ives sees upside for Apple following the iPhone 16 launch, driven by consumer-excitement for AI features. He projects iPhone 16 shipments of nearly 90 million units, surpassing earlier Street expectations of 80 to 84 million, a double-digit year-over-year increase. "The new era of personalization and how consumers interact with their iPhones has now begun; this will cause a renaissance of iPhone growth for Apple over the next 12 to 18 months and drive shares higher with a $4 trillion market cap in 2025. Raising price target to $300," Ives wrote in a post on X. What Else: Apple was dealt a blow by the Court of Justice of the European Union on Monday as it upheld the European Commission's 2016 decision that Ireland should recover up to $14.4 billion in back taxes from Apple. "Ireland granted Apple unlawful aid which Ireland is required to recover," the EU court said. Will AAPL Stock Go Up? When trying to assess whether or not Apple will trade higher from current levels, it's a good idea to take a look at analyst forecasts. Wall Street analysts have an average 12-month price target of $250.39 on Apple. The Street high target is currently at $300 and the Street low target is $186. Of all the analysts covering Apple, 40 have positive ratings, 7 have neutral ratings and 2 have negative ratings. In the last month, 17 analysts have adjusted price targets. Here's a look at recent price target changes [Analyst Ratings]. Benzinga also tracks Wall Street's most accurate analysts. Check out how analysts covering Apple have performed in recent history. Stocks don't move in a straight line. The average stock market return is approximately 10% per year. Apple is 19.0% up year-to-date. The average analyst price target suggests the stock could have further upside ahead. For a broad overview of everything you need to know about Apple, visit here. If you want to go above and beyond, there's no better tool to help you do just that than Benzinga Pro. Start your free trial today. AAPL Price Action: According to Benzinga Pro, Apple shares are down 0.89% at $218.95 at the time of publication Tuesday. Read Also: What's Going On With GameStop Stock Ahead Of Earnings? Image: Courtesy of Apple, Inc. Market News and Data brought to you by Benzinga APIs

These Stock Analysts Are Bullish on Apple's iPhone 16 Launch -- Here's Why

iPhone 16 pre-order data this Friday and early sales following the Sept. 20 release could offer more insights into consumer appetite for the new products. Analysts are largely bullish Apple (AAPL) could see an AI-fueled upgrade cycle after the tech giant revealed the AI-charged iPhone 16 on Monday, though some warned a slow rollout of new AI features could hold back sales in the near term. Most Apple analysts tracked by Visible Alpha hold a "buy" or equivalent rating for the stock after Apple unveiled its latest iPhone with AI-powered capabilities, along with new versions of its smartwatch and AirPods. A number of analysts including those from JPMorgan, Jefferies, and Wedbush said Monday and Tuesday that they anticipate an AI-driven upgrade cycle following Monday's launch event. However, the lack of a "specific timeline" for the rollout of many AI features leaves some uncertainty around Apple's AI plans, JPMorgan analysts said, which could delay sales. Jefferies analysts said the vague timeline for AI feature releases could turn the coming upgrade cycle into a multi-year cycle that includes releases of the iPhone 17 and beyond once more useful features are broadly available, rather than massive upgrades to the iPhone 16. JPMorgan and Morgan Stanley analysts also said other improvements important to consumers like camera and battery life could drive upgrades, along with "attractive" trade-in offers from Apple and cellular carriers. Several analysts said their focus has now shifted to pre-order data this Friday and early sales data following the Sept. 20 launch to provide insight into how consumers view the new phones. Bank of America analysts added that health features of the new smartwatch and AirPods could broaden markets for the products, "driving more users" to Apple's ecosystem. The Apple Watch Series 10 and AirPods Pro 2 both have features pending Food and Drug Administration (FDA) approval, with the watch offering a new sleep apnea detection program and the AirPods able to function as a hearing aid. Given the connection Apple looks to foster between its products, Needham analysts said sales of the wearable products driven by the health updates could help boost future sales of iPhones once more definitive AI capabilities are added. Apple shares were little changed at $220.49 in intraday trading Tuesday, and have gained over 14% since the start of the year.

Apple iPhone Event Falls Flat (NASDAQ:AAPL)

Apple's calendar 2025 valuation is high compared to its large-cap tech peers, with lower top and bottom-line growth expectations. On Monday, technology giant Apple Inc. (NASDAQ:AAPL) held its Glowtime event. While the company showed off new versions of the Watch and AirPods, the main attraction for the show was this year's iPhone launch. Unfortunately, given all the rumors we've heard about for months, as well as the nearly 30% jump in shares over the past six months, the event didn't do much to excite. It's been about two months since I last looked at Apple shares. In early July, I detailed how I believed that the upcoming earnings report could be irrelevant. My thesis was that all eyes would be on this year's iPhone launch, as both consumers and investors were waiting to see Apple's first major foray into artificial intelligence with its smartphones. At that time, I had a neutral rating on Apple shares because the valuation had been stretched and shares were running quite a bit ahead of the average street target price. I believed the near-term upside was rather limited, and I turned out to be right. Since my previous article, Apple shares have returned a negative 4.1%, which is almost double the loss of the S&P 500 over that time. Apple launches iPhone 16: I won't get overly technical here, since most of the new hardware details and features have been rumored or leaked for some time now. You can read a run-down of everything announced right here. When it comes to the Apple Watch and AirPods, the company made its usual set of improvements, but it also made a point of adding some artificial intelligence features. For the Watch, a new design was shown off along with a faster charging experience, while a focus was made on health issues surrounding AirPods. When it comes to the iPhone, there weren't too many surprises. The Pro versions got larger displays, while also getting the expected Pro version of the new A18 chip. This allowed Apple to bring the A18 chip to the base two versions of the iPhone 16, meaning a two-generation leap. The lower-level iPhones had previously had an older generation chip than their current year counterparts, part of which was due to the chip shortage problem we saw a few years ago. In the graphic below, you can see the available iPhone models over the past four years, with each year's respectively launched models (excluding the SE) in yellow. There are two key takeaways here, in my opinion. First, Apple kept the 14 Plus variant around, an extra version that's now two years old. I'm not sure if that's due to device popularity, some excess inventory, or an effort to keep overall iPhone pricing down. Last year, there were 25 different iPhones available (in terms of model/storage configurations) with an average price of $958.60. By keeping the 14 Plus here, this year has 28 available with an average price of $945.00, or about a 1.42% decrease. My second takeaway here is on the margin side. It would not surprise me if we see gross margins for the phones come down a little this year. Jumping two years forward with the chips for the two base versions will add a little cost pressure, and the larger screens on the Pro models will also cost a bit more. With Apple bolstering the iPhone's brain as it looks to make a jump in artificial intelligence, we could see gross margin percentages decrease slightly. However, if Apple sells more phones as many analysts expect, it could still see an increase in total gross margin dollars. Currently, the Street is looking for 7.65% revenue growth in Apple's fiscal 2025 (ending September 2025) period, up from less than 1.9% in the current fiscal year that ends in a few weeks. While the services segment will likely continue as the overall revenue growth leader, analysts expect iPhone revenue growth to accelerate. A look at valuation: There are a couple of things to look at here. The first thing I like to look at is the price-to-earnings ratio. As the chart below shows, Apple trades at almost 29 times its calendar 2025 street expected earnings (fiscal year does end in September). That number is about the same as peer Microsoft (MSFT), but Apple is only expected to show about half of the revenue and earnings growth, in percentage terms. Furthermore, Alphabet (GOOG, GOOGL) and Meta Platforms (META), which are growing about the same as Microsoft, are trading at much more reasonable valuations. In terms of the analyst community, things have flipped quite a bit. On the hopes of artificial intelligence, Apple shares are now about $20 below the average price target on the street. That's mostly a reflection of the street hiking its targets quite a bit in the last couple of months. When I last looked at the name, Apple traded $15 over the average street target. In the end, Apple's product launch event on Monday was about as expected. The company showed off its new Watches, iPhones, and AirPods, all with a focus on artificial intelligence. Apple AI will start to roll out next month for its smartphones, but only in the US for the English language, with expansion coming in December and further in 2025. The iPhone's pricing was kept the same, except for keeping around an extra version of an older generation, so there could be some slight hits to margins here. In terms of Apple shares, I'm going to keep my hold rating on the stock here. As usual, there were enough leaks ahead of time so that there weren't any major surprises on Monday, so the stock declined a little as another example of a "buy the rumor, sell the news" event. The valuation remains a bit high as compared to its large-cap tech peers, despite the lowest growth profile of the bunch. There are some lofty expectations here baked into shares right now that artificial intelligence can power a supercycle in phone sales. This leads me to believe there's slightly more room for disappointment than an upside surprise.