According to 9to5Mac, Bank of America analyst Wamsi Mohan has maintained his “Buy” rating on Apple while raising the price target from $250 to $320, representing a potential 19.4% increase from the current $268.22 stock price. The updated outlook comes ahead of Apple’s fiscal fourth-quarter earnings release this Thursday, with Mohan citing stronger-than-expected iPhone 17 Pro and Pro Max sales and raising his iPhone unit estimates accordingly. The analyst expects Apple to guide for high single-digit year-over-year revenue growth in the current quarter, marking a significant shift from his more cautious stance in August. Beyond iPhone performance, Mohan highlighted artificial intelligence as a major driver, suggesting Apple could eventually become an AI leader while acknowledging potential disruption to traditional search revenues.
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The iPhone 17’s Unexpected Resilience
What makes this analyst upgrade particularly noteworthy is the dramatic reversal from just three months ago. In August, Mohan had warned investors to temper expectations for the iPhone 17 cycle, reflecting broader market concerns about iPhone saturation and lengthening upgrade cycles. The fact that Pro and Pro Max models are outperforming expectations suggests Apple’s premiumization strategy continues to bear fruit, even in a challenging global economic environment. This performance becomes even more impressive considering the stock’s 10% year-to-date gain despite April’s sharp decline amid Trump trade war uncertainties. From its $174 low point, Apple has climbed an remarkable 56%, demonstrating the stock’s resilience and investor confidence in the company’s ability to navigate geopolitical headwinds.
The High-Stakes AI Bet
While the iPhone strength provides near-term validation, the AI component represents a much more speculative but potentially transformative bet. Mohan’s mention of “AI augmented eye-wear” and “in-house AI robots/smart home” suggests Apple may be developing entirely new product categories beyond its current lineup. This would mark a significant departure from Apple’s recent strategy of iterative improvements to existing products. The reference to disruption in “traditional search revenues” hints at Apple’s potential to leverage its privacy-first approach and integrated hardware-software ecosystem to create AI services that compete with established search and advertising giants. However, this ambition faces substantial execution risk, as Apple has historically been slower than competitors in adopting and implementing cutting-edge AI features.
The Earnings Reality Check
The timing of this upgrade is crucial, arriving just before Apple’s Q4 earnings announcement. While Bank of America appears confident in strong guidance, investors should watch for several key metrics beyond the headline numbers. Service revenue growth will be particularly important as it represents Apple’s highest-margin business and could offset any hardware volatility. China performance remains a wild card given ongoing trade tensions and increasing domestic competition. The company’s commentary on AI integration timelines and specific product roadmaps will be scrutinized for details supporting Mohan’s optimistic projections. As CNBC coverage of analyst notes often influences market sentiment, this upgrade could create elevated expectations that Apple management will need to meet or exceed to maintain momentum.
Navigating an Evolving Competitive Landscape
Apple’s AI ambitions arrive in a market where competitors have significant head starts. Google and Microsoft have deployed AI across their ecosystems for years, while smartphone rivals like Samsung have integrated generative AI features into their latest devices. Apple’s traditional strength has been creating seamless, privacy-focused experiences rather than being first to market with new technologies. The challenge will be whether Apple can leverage its integrated hardware-software approach and massive installed base to deliver AI experiences that feel fundamentally different and more valuable than what competitors offer. If successful, this could justify the premium valuation implied by the $320 price target. If not, Apple risks being perceived as playing catch-up in the most transformative technology shift since the smartphone itself.
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