Apple (NASDAQ: AAPL) stock received a bullish update from Wedbush on May 8, as the company raised its price target on the iPhone maker from $350 to a Street-high $400.
The wealth management firm argued that Apple is entering a new phase driven primarily by artificial intelligence (AI) and expects that roughly 20% of the world’s population is going to access the new technology through an Apple device.
Moreover, Wedbush analysts believe that monetizing AI-powered services and storage features could generate an additional $15 billion in annual services revenue. Accordingly, they described Apple as a potential ‘consumer hub of AI’ technology for its global user base.
“We believe over the next few years Apple will be able to monetize the AI Services and storage features translating into what could be an additional $15 billion of annual services revenue for Apple as it starts to become the ‘consumer hub of AI’ technology for its global user base.” Wedbush wrote.
Wedbush welcomes Apple’s partnership with Alibaba
The analysts also highlighted Apple’s partnership with Alibaba (NYSE: BABA) as an important part of the new AI strategy, despite all the uncertainty surrounding U.S.-China relations.
Specifically, Wedbush believes the collaboration could help Apple further expand its already large installed base in the region.
“In China despite Beltway scrutiny we believe Apple’s partnership with Alibaba on AI will become more important as Cupertino goes after its massive and growing installed base in China. These are all incremental steps leading to an AI enabled Apple iPhone likely with significant redesigns in 2027 on the 20th anniversary edition,” the firm added.
Looking ahead, the research note pointed to the potential launch of an AI-focused iPhone redesign in 2027, coinciding with the 20th anniversary of the device. Such product upgrades, the analysts suggested, could mark another major AI integration catalyst.
Apple stock price target
With the latest price upgrade, the average AAPL share price target for the next 12 months sits at $314.78, which suggests a 7.31% upside potential, citing numbers available on TipRanks.
Over the past three months, 28 Wall Street analysts have, on average, rated Apple a ‘Moderate Buy,’ with 17 ‘Buy,’ ten ‘Hold,’ and only one ‘Sell’ recommendation.
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