Apple Stock Soars: Analysts Bullish on Tech Giant's Future

A Bull Market Is Here. 2 Reasons to Buy Apple Stock Like There's No Tomorrow. | The Motley Fool

The company is just around the corner from fresh quarterly earnings and a highly anticipated product launch. Apple's (AAPL 1.30%) stock has popped 18% in the last month. Various factors have driven growth, such as a first look at its artificial intelligence (AI) platform Apple Intelligence, reports of increased product sales, and expectations that the Federal Reserve could soon lower interest rates (which would allow for lower borrowing costs). The rally is a welcome change after dismal growth for much of the first half of 2024. The chart above shows that up until June, Apple's stock had actually declined, underperforming when compared to some of its "Big Tech" rivals. Apple's lack of growth primarily stemmed from concerns over revenue declines in its products business and its lack of a position in AI. However, the iPhone company appears to be turning things around with changes in its product strategy. Meanwhile, Apple has market trends on its side, with a bull market sending the S&P 500 up 56% since October 2022. The tech giant appears to be on a growth path. Here are two reasons to buy Apple stock like there's no tomorrow during this bull market. Apple's second-quarter results (posted May 2) were fairly positive, despite revenue dipping 4% year over year. Net sales of $91 billion beat Wall Street expectations by $190 million. Meanwhile, earnings per share (EPS) of $1.53 rose above forecasts by about $0.03. After significant growth in its digital-services division, the company enjoyed an overall rise in gross profit margins, hitting 47%. However, Apple could be in for an even better Q3 2024 (which it will report Aug. 1), with expected boosts in its Mac and iPhone segments. Data from IDC shows a PC market recovery has continued into the second quarter, rising 3% year over year. Lenovo, HP, and Acer experienced increases between 2% and 14% during the period. However, Apple delivered the most growth, with sales in its Mac segment soaring 21%. Moreover, recent reports indicate a significant boost to iPhone sales in China, Apple's third largest market. According to Bloomberg, iPhone shipments in the East Asian country jumped 40% in May after rising 50% in April. Sales in China have been a sore point for Apple this year, declining 8% year over year in Q2 2024 amid rising competition from domestic brands like Huawei. Apple has responded to the declines with heavy discounts on its products, which appear to be paying off. Discounts can sometimes be a short-term solution to a problem. However, consumers' tendency to rarely switch operating systems when it comes to smartphones could play in Apple's favor as the sales potentially create long-term customers. Like clockwork, Apple unveils its latest iPhone lineup every September, and 2024 is no different. However, this year's iPhone launch could be one of its most crucial to date, with the company expected to extend its push into AI. iPhone sales decreased 10% year over year in Q2 2024, alongside declines in other product segments. As the highest-earning part of Apple's business, the smartphone division appeared to be in need of an overhaul. As a result, Apple is strategically using its AI expansion to boost iPhone and other product sales. In June, the company announced Apple Intelligence, an AI platform created to enhance user experience across its lineup. Tools such as image and language generation, significant upgrades to Siri that will allow access to OpenAI's ChatGPT, and more are meant to simplify everyday tasks with AI. During the presentation, Apple revealed only iPhone 15 Pros and higher will be able to access Apple Intelligence. Meanwhile, Mac and iPad users will need devices equipped with the company's M1 through M4 chips to enjoy the features. Apple Intelligence is slated for a fall release, just in time for the launch of the iPhone 16. It's unknown what other features the new smartphone will include, but it will be the first iPhone explicitly designed with AI in mind. As a result, the smartphone could boost sales in the coming months and encourage shoppers to upgrade to other products in the lineup that have access to Apple Intelligence. Bloomberg reported on July 10 that Apple has told suppliers it's targeting about 10% growth in iPhone 16 shipments after iPhone 15 sales hit 81 million in the second half of 2023. Apple's stock is trading at about 35 times its forward earnings, which means it doesn't offer the best value. However, its proven ability to increase profit margins and cash flow could make it worth its premium price. Boosts in product sales will likely lead to further growth in its digital-services segment as users take advantage of the new AI features. The company's AI push has opened the door to countless growth opportunities and ways to monetize its offerings in the coming years. In addition to hitting $102 billion in free cash flow this year, Apple remains an attractive long-term buy that could be on the brink of a rally.

A Bull Market Is Here. 2 Reasons to Buy Apple Stock Like There's No Tomorrow.

Apple's (NASDAQ: AAPL) stock has popped 18% in the last month. Various factors have driven growth, such as a first look at its artificial intelligence (AI) platform Apple Intelligence, reports of increased product sales, and expectations that the Federal Reserve could soon lower interest rates (which would allow for lower borrowing costs). Data by YCharts. The rally is a welcome change after dismal growth for much of the first half of 2024. The chart above shows that up until June, Apple's stock had actually declined, underperforming when compared to some of its "Big Tech" rivals. Apple's lack of growth primarily stemmed from concerns over revenue declines in its products business and its lack of a position in AI. However, the iPhone company appears to be turning things around with changes in its product strategy. Meanwhile, Apple has market trends on its side, with a bull market sending the S&P 500 up 56% since October 2022. The tech giant appears to be on a growth path. Here are two reasons to buy Apple stock like there's no tomorrow during this bull market. Earnings season is right around the corner Apple's second-quarter results (posted May 2) were fairly positive, despite revenue dipping 4% year over year. Net sales of $91 billion beat Wall Street expectations by $190 million. Meanwhile, earnings per share (EPS) of $1.53 rose above forecasts by about $0.03. After significant growth in its digital-services division, the company enjoyed an overall rise in gross profit margins, hitting 47%. However, Apple could be in for an even better Q3 2024 (which it will report Aug. 1), with expected boosts in its Mac and iPhone segments. Data from IDC shows a PC market recovery has continued into the second quarter, rising 3% year over year. Lenovo, HP, and Acer experienced increases between 2% and 14% during the period. However, Apple delivered the most growth, with sales in its Mac segment soaring 21%. Moreover, recent reports indicate a significant boost to iPhone sales in China, Apple's third largest market. According to Bloomberg, iPhone shipments in the East Asian country jumped 40% in May after rising 50% in April. Sales in China have been a sore point for Apple this year, declining 8% year over year in Q2 2024 amid rising competition from domestic brands like Huawei. Apple has responded to the declines with heavy discounts on its products, which appear to be paying off. Discounts can sometimes be a short-term solution to a problem. However, consumers' tendency to rarely switch operating systems when it comes to smartphones could play in Apple's favor as the sales potentially create long-term customers. The coming iPhone release will likely unveil Apple's next push into AI Like clockwork, Apple unveils its latest iPhone lineup every September, and 2024 is no different. However, this year's iPhone launch could be one of its most crucial to date, with the company expected to extend its push into AI. iPhone sales decreased 10% year over year in Q2 2024, alongside declines in other product segments. As the highest-earning part of Apple's business, the smartphone division appeared to be in need of an overhaul. As a result, Apple is strategically using its AI expansion to boost iPhone and other product sales. In June, the company announced Apple Intelligence, an AI platform created to enhance user experience across its lineup. Tools such as image and language generation, significant upgrades to Siri that will allow access to OpenAI's ChatGPT, and more are meant to simplify everyday tasks with AI. During the presentation, Apple revealed only iPhone 15 Pros and higher will be able to access Apple Intelligence. Meanwhile, Mac and iPad users will need devices equipped with the company's M1 through M4 chips to enjoy the features. Apple Intelligence is slated for a fall release, just in time for the launch of the iPhone 16. It's unknown what other features the new smartphone will include, but it will be the first iPhone explicitly designed with AI in mind. As a result, the smartphone could boost sales in the coming months and encourage shoppers to upgrade to other products in the lineup that have access to Apple Intelligence. Bloomberg reported on July 10 that Apple has told suppliers it's targeting about 10% growth in iPhone 16 shipments after iPhone 15 sales hit 81 million in the second half of 2023. Potentially worth its premium price tag Apple's stock is trading at about 35 times its forward earnings, which means it doesn't offer the best value. However, its proven ability to increase profit margins and cash flow could make it worth its premium price. Boosts in product sales will likely lead to further growth in its digital-services segment as users take advantage of the new AI features. The company's AI push has opened the door to countless growth opportunities and ways to monetize its offerings in the coming years. In addition to hitting $102 billion in free cash flow this year, Apple remains an attractive long-term buy that could be on the brink of a rally. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $791,929!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, HP, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Apple at record high as analysts revamp stock price targets

Apple shares moved firmly higher in early Monday trading, putting the stock on pace for another record open, following a pair of price-target upgrades from Wall Street analysts. Apple (AAPL) has added around $300 billion in market value since it unveiled its ambitions to blend AI technologies into its new iPhone 16 and investors bet the moves will trigger a massive cycle of new handset purchases. Apple, which has dubbed its new technologies Apple Intelligence, is planning a major reboot of its Siri digital assistant and a series of new features for its 2.2 billion-strong hardware base. Apple's strategy aims to integrate a host of artificial-intelligence-powered tasks, such as summarization, text generation, photo editing and enhanced search, into its ecosystem of iPhone, iMacs and iPads. Morgan Stanley analyst Erik Woodring, in fact, argues that investors are "underappreciating" the Apple Intelligence launch, calling it a "clear catalyst for a multiyear product upgrade cycle." Apple a Morgan Stanley 'Top Pick' Woodring, who lifted his Apple price target by $57 to $273 a share, said the tech giant could ship nearly 500 million iPhones over the next two years as a result of the upgrade cycle. "This will drive 5% annual iPhone [average selling price] growth, resulting in nearly $485 billion of total revenue and $8.70 in earnings power by fiscal 2026 (vs. $459 billion and $8.20 previously), 7% to 9% above consensus," said Woodring. He elevated Apple to a Top Pick for the investment bank among hardware-focused tech stocks. "Near-term positive catalysts include [fiscal-third-quarter] earnings, the mid-September iPhone launch, and potential positive iPhone build revisions in mid-October," Woodring said. Related: Top analyst revisits Apple stock price target following AI push "Accelerating unit growth historically drives Apple stock outperformance, making the recent outperformance sustainable," he added. Loop Capital analyst Ananda Baruah also increased his Apple price target, taking it $130 higher to $300 a share while boosting his rating to buy from hold, citing the potential impact of an accelerated upgrade cycle. "Apple has an opportunity over the next few years to solidify itself as consumers' [generative-AI] 'base camp' of choice, similar to its impact with the iPhone for social media and the iPod for digital content consumption," Baruah wrote, citing his colleague and supply-chain analyst John Donovan. "These trends were significant stock catalysts, and we believe generative AI has the potential to be the same," Baruah said. Generative AI derives new and original content, including text, images, video and more, from existing material. Apple earnings in focus Apple will report its fiscal-third-quarter earnings on Thursday, Aug. 8, after the market close. Analysts are looking for a bottom line of $1.34 per share on revenue of $84.2 billion, a 2.9% increase from the year-earlier period. Apple's overall revenue for the three months ended in March fell 4.3% from a year earlier to $90.8 billion, but the tally topped Wall Street forecasts and included a smaller-than-expected decline in overall China sales. The group also posted a stronger-than-expected bottom line of $1.53 a share, as well as operating cash flow of $22.7 billion and an improving gross-profit margin of 46.6%. Related: Analyst predicts Tesla's Elon Musk may create Apple rival "Apple's June quarter is the opening act for the main event in September," said Wedbush analyst Dan Ives in a recent client note. "We now believe initial iPhone 16 shipments will be closer to 90 million (with upside movement likely as we get closer to launch date in September) vs. original [Wall Street] expectations in the 80 million to 84 million range and up double digits year-on-year." Since the Apple Worldwide Developers Conference in early June, "we believe optimism is growing throughout the Asia supply chain that this iPhone 16 AI-driven upgrade could represent a golden upgrade cycle for Cupertino looking ahead with pent-up demand building globally," he added. Apple shares were marked 2.1% higher in premarket trading to indicate an opening bell price of $235.34 each, a move that would extend the stock's six-month gain to around 28%. Related: Veteran fund manager sees world of pain coming for stocks

Morgan Stanley raises Apple stock target, rated Overweight By Investing.com

On Monday, Morgan Stanley (NYSE:MS) has reiterated its Overweight rating on Apple shares (NASDAQ:AAPL), raising the price target to $273 from the previous $216. The firm emphasizes the potential of "Apple Intelligence" to initiate a significant multi-year upgrade cycle for Apple's products. This upgraded outlook is based on the anticipation that Apple will sell nearly 500 million iPhones over the next two years, which is a 6% increase from the record sales cycle of fiscal years 2021-2022. The firm's analysis suggests that Apple's upcoming upgrade cycle could be more substantial than previously estimated, potentially leading to nearly $485 billion in total revenue and $8.70 in earnings power by fiscal year 2026. These figures are 7-9% above the consensus. A price-to-earnings target multiple of 31x is the basis for the new price target, indicating a more than 20% upside and a favorable risk-reward skew. Morgan Stanley highlights three near-term positive catalysts for Apple: the third fiscal quarter earnings, the mid-September iPhone launch, and the potential for positive iPhone build revisions in mid-October. According to the firm, these factors, combined with historical trends showing that accelerating unit growth tends to drive Apple stock outperformance, support the view that Apple's recent market success is likely to continue. Apple is now Morgan Stanley's top pick in the U.S. IT Hardware sector, surpassing Dell (NYSE:DELL), which is now the firm's preferred enterprise hardware Overweight. The firm's decision to elevate Apple's status is rooted in a series of analyses and projections that underscore the tech giant's growth trajectory and market position. In other recent news, Apple Inc. has been the subject of various developments in the tech industry. Morgan Stanley raised its Apple stock target to $273, citing potential growth in iPhone and iPad shipments. The revised forecast for the company's fiscal year 2026 earnings per share (EPS) is now $8.70, 7% above Wall Street's consensus estimates. In parallel, Taiwan Semiconductor Manufacturing Co (TSMC) is predicted to see a 30% surge in its second-quarter profit due to robust demand for AI chips. This projection is based on a LSEG SmartEstimate that aggregates projections from 20 analysts. Apple has also agreed to open up its near-field communication (NFC) technology to competitors, resolving a long-standing EU antitrust investigation. This move will allow for more competitive mobile payment solutions within the iOS ecosystem in the European Economic Area. TSMC's shares have reached a significant milestone, surpassing the trillion-dollar mark, driven by the demand for AI applications. This achievement solidifies TSMC's status as Asia's most valuable company. In the personal computer industry, Apple has seen a substantial 20.8% growth in global shipments in the second quarter, outpacing other manufacturers. This surge in demand is attributed to AI-capable devices. Finally, KeyBanc Capital Markets maintained its Sector Weight rating on shares of Apple, citing an increase in iPhone 16 production forecasts and recent financial data, while expressing caution regarding Apple's near-term growth prospects. Morgan Stanley's optimistic outlook on Apple's future is echoed by some of the data available on InvestingPro. Apple's market capitalization stands at an impressive $3.54 trillion, underlining its position as a heavyweight in the tech industry. The company's P/E ratio, as of the last twelve months leading up to Q2 2024, is 35.21, which is high but could be justified by Apple's robust return on assets of 29.99%, indicating efficient management and a strong market position. Additionally, Apple has shown resilience with a gross profit margin of 45.59%, suggesting that it maintains a significant competitive edge in terms of profitability. InvestingPro Tips further reveal that Apple has a track record of raising its dividend for 13 consecutive years, a testament to its financial health and commitment to shareholder returns. Moreover, the company's stock has experienced a strong return over the past three months, with a 33.68% price total return, which could be an indicator of investor confidence in its growth prospects. For readers looking for more in-depth analysis and additional InvestingPro Tips, there are currently 17 more tips available for Apple. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription to gain access to exclusive insights and data that can inform their investment decisions.

Apple projected to post record upgrade cycle; firms up estimates, price targets

Apple (NASDAQ:AAPL) is poised to post a record multi-year upgrade cycle as Apple Intelligence provides a clear catalyst, according to Morgan Stanley. "Our deep-dive analysis into Apple's upgradeable iPhone base, upgrade rates, new user growth and iPhone model mix suggests that Apple will ship nearly 500M iPhones over the next two years, 6% higher than the record FY21-FY22 cycle, while also driving 5% annual iPhone ASP growth, resulting in nearly $485B of total revenue and $8.70 of earnings power by FY26, 7-9% above consensus," said Morgan Stanley analysts Erik Woodring, Maya Neuman and Oluebube Udochukwu, in a note. Morgan Stanley had previously set a revenue estimate of $459B on earnings of $8.20 per share for Apple's fiscal 2026. Morgan Stanley also increased Apple's price target to $273 from $216 and listed the Cupertino darling as a "Top Pick." The bank expects Apple to ship 235M iPhones in fiscal 2025 and 262M in fiscal 2026. Meanwhile, Loop Capital upgraded Apple's rating to Buy from Hold on Monday. It also nearly doubled its price target to $300 from $170. Loop Capital supply chain analyst John Donovan believes Apple has the opportunity "to solidify itself as consumer's Gen AI 'base camp' of choice, just as it did for social media 15 years ago (with iPhone) and digital content consumption 20 years ago (with iPod)," the investment firm said in a note on Monday. "Each of those trends were material stock catalysts and the basic math suggests that Gen AI has the opportunity to be the same," said Loop analyst Ananda Baruah. Apple has a Hold rating from Seeking Alpha analysts, but a Buy rating from Wall Street analysts. It has a Hold rating from Seeking Alpha's Quant system, which routinely beats the market. Apple plans to announce its third quarter fiscal 2024 results on Aug. 1. Analysts' estimates expect earnings per share of $1.32 on revenue of $83.73B.