Apple Inc. (NASDAQ: AAPL) is riding high after hitting new highs, with Wedbush Securities analyst Dan Ives raising his 12-month price target for the company from $300 to $325, the highest target currently on Wall Street.
Calling this a “golden era of growth,” Ives anticipates that Apple’s artificial intelligence (AI) strategy and consumer-driven demand will propel the company toward a $4 trillion market cap by 2025.
As of the market close on December 26, 2024, Apple shares were priced at $259.14, marking a 1.64% gain over the past five days. Year-to-date, the tech giant’s stock has surged more than 39%, bringing its current market capitalization to $3.91 trillion.
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Apple’s AI push fuels growth
Apple’s push into AI began with the launch of the iPhone 16 series on September 20, followed by the debut of Apple Intelligence features in late October.
A second batch of these features was released in December, available exclusively for newer iPhones, iPads, and Mac computers. The updates, including tools like Genmoji and ChatGPT integration into Siri, and Visual Intelligence, signal a shift toward AI-driven experiences.
Dan Ives highlights that these upgrades are driving a multi-year iPhone upgrade cycle, with 300 million devices globally overdue for replacement.
Wedbush estimates Apple could sell over 240 million iPhones in Fiscal Year 2025, spurred by pent-up demand and attractive carrier discounts, potentially making it the most successful year in the company’s history.
“It will ultimately be AI-driven, and that’s why this is the start of what’s going to be a two-year AI-driven supercycle. And I think the one thing underestimated is the install base here. The monetization is only 15% penetrated. That goes to 25-30% penetration. We’re not talking about $4 trillion 12–18 months from now; we’re talking about $5 trillion”- Dan Ives
While Apple’s valuation multiples remain high, Ives highlighted the untapped potential within the company’s $2 trillion Services segment.
The integration of Apple Intelligence is projected to contribute an additional $5 to $10 billion in annual revenue significantly boosting the ecosystem’s value.
Ives describes this period as a “golden era of growth,” predicting Apple’s market capitalization to surpass $4 trillion in the near term, with a clear path to $5 trillion as AI adoption accelerates.
Bullish optimism meets market caution
While the bullish outlook dominates, not all analysts share the same sentiment.
BTIG’s Jonathan Krinsky has urged caution, pointing out that Apple has delivered five consecutive weekly gains of 2% or more—a rare streak that has historically preceded negative short-term returns. With Apple’s market capitalization approaching $4 trillion, the potential for a pullback cannot be ignored.
Outlook for 2025
Apple’s journey in 2024 has not been without hurdles. The company has faced declining iPhone sales, intensifying competition in China, and regulatory challenges.
Initial doubts about the iPhone 16 lineup even prompted investment firm Jefferies to downgrade the stock. However, strong fourth-quarter sales and positive shipment data have vindicated Apple’s AI-led strategy.
As the tech giant edges closer to becoming the first $4 trillion company, analysts remain divided.
Wedbush continues to see substantial growth opportunities in next-generation hardware and AI integration, but external risks such as rising production costs due to tariffs and inflation loom large.
The coming months will reveal whether Apple can maintain its momentum and solidify its dominance in the AI-driven era or face the weight of its lofty valuation.
Featured image via Shutterstock
