Apple (NASDAQ: AAPL) stock rose during intraday trading Wednesday as Wall Street analysts predict a major iPhone upgrade cycle thanks to AI.
Two Wall Street analysts, Wamsi Mohan of BofA Securities and Daniel Ives of Wedbush Securities, have forecasted that artificial intelligence (AI) capabilities will significantly boost Apple’s iPhone business, potentially driving a major upgrade cycle.
In a note to clients, Wamsi Mohan stated,
“AI functionality is likely to drive a multiyear upgrade cycle for iPhones.”
He believes that Wall Street’s current consensus estimates for iPhone sales are underestimated for the next two years. According to Mohan, Apple’s AI initiatives could shorten replacement cycles and enhance the appeal of upgrading to new models.
Daniel Ives of Wedbush Securities echoed similar sentiments, describing Apple’s AI push as a catalyst for a long-awaited super cycle in iPhone sales. Ives highlighted that a substantial portion of Apple’s installed base—specifically 270 million iPhones out of 1.5 billion worldwide—have not been upgraded in more than four years, indicating pent-up demand that AI enhancements could unlock.
Apple Stock Tops Microsoft In Market Value
Apple’s stock performance has reflected investor optimism since the company unveiled its AI strategy, Apple Intelligence, at the Worldwide Developers Conference on Monday. During the event, Apple executives underscored on-device AI capabilities for its products, particularly the iPhone.
On Wednesday, Apple (NASDAQ: AAPL) briefly overtook Microsoft (NASDAQ: MSFT) as the world’s most valuable company, achieving a market capitalization of $3.27 trillion. Although Microsoft ended the session higher with a market cap of $3.28 trillion, Apple’s stock rally highlights the market’s positive reception to its AI plans.
Mohan anticipates compelling AI features could lure Android users into the Apple ecosystem, further bolstering sales. He predicts that iPhone unit sales could reach 247 million in 2025 and 257 million in 2026, surpassing current estimates of 241 million and 238 million, respectively.
Both analysts expressed bullish sentiments on Apple stock. Mohan reiterated a buy rating with a price target of $230, while Ives maintained an outperform rating with a price target of $275.
Apple (NASDAQ: AAPL) Stock Price Action
On Wednesday, AAPL stock jumped 2.86%, closing at $213.07, marking an 8.78% increase for the week. The trading volume was 194,777,430 shares, significantly higher than the average daily volume of 62.57 million.
