Why Analysts Think AI Could Be Key to More Apple Stock Gains

After Apple (AAPL) CEO Tim Cook said the iPhone maker is seeing record iPhone upgrades with the rollout of Apple Intelligence, several analysts raised their price targets for the company’s stock, pointing to AI updates as a potential source of growth.

Morgan Stanley analysts said Apple’s first-quarter results underlined how “Apple Intelligence is bolstering iPhone performance,” and suggested a “cleaner catalyst path” for updates expected in the coming months. The analysts raised their price target to $275 from $273 and maintained an “overweight” rating. They added the launch of a lower-cost iPhone SE4 could also help revenue.

Of the 17 analysts covering the stock tracked by Visible Alpha, 10 have issued “buy” or equivalent ratings, compared to five “hold” ratings, and two “sell” ratings. Their consensus price target is about $253, a roughly 7% premium over Apple’s closing price Friday. 

Cook said on the company’s earnings call Thursday that Apple Intelligence will roll out in more languages in April, and users can also expect new features like an “even more capable Siri” in the future. He added that Apple has seen better performance from the iPhone 16 lineup in regions where Apple Intelligence is available, compared to markets where it hasn’t been rolled out.

This comes amid concerns about falling sales in China, where Apple Intelligence remains unavailable due to regulatory hurdles. Apple’s first-quarter revenue fell 11% year-over-year in the region, as Chinese smartphone makers like Vivo and Huawei gained market share.

Wedbush analysts, who maintained a $325 price target, expressed confidence that Apple could find an artificial intelligence partner in the region to facilitate an Apple Intelligence rollout in the county as soon as April.

“We believe as Apple Intelligence rolls out in China we will see growth markedly rebound in this region to double digits,” they said. 

Cook also said that recent fiscal stimulus announced in the country would “cover the categories that we have products,” which JPMorgan analysts suggested could improve sales. JPMorgan raised its price target for Apple stock to $270 from $260.

Shares of Apple fell 0.7% to $236 Friday, after paring back gains earlier in the session. They’ve added about 27% over the past 12 months.