Apple Stock Gets a Bullish Upgrade From HSBC – Here’s Why

Apple (NASDAQ:AAPL) has famously been missing in action from the massive AI infrastructure buildouts its peers have undertaken, but it looks like investors are happy with that decision.

The stock is currently the strongest-performing Mag 7 name this year, indicating that investors are beginning to appreciate that success in AI may not require developing the largest models, but rather controlling how consumers interact with the technology.

Now it seems that one Street analyst has also realized that Apple’s AI strategy could be about to pay off. HSBC analyst Nicolas Cote-Colisson upgraded Apple’s rating from Hold to Buy and raised the price target from $260 to $366, implying the stock will gain 10% over the coming months. (To watch Cote-Colisson’s track record, click here)

“Thus far, we had retained a cautious approach on Apple with a Hold rating,” said Cote-Colisson. “We had preferred other segments of the AI value chain, more prompt to exploit the bottlenecks created by the high demand in computing power, including hyperscalers or memory makers.”

But now Apple is at an “operational turning point,” with the analyst arguing that the company can avoid the heavy capital expenditure burden associated with AI infrastructure investment while benefiting from its massive ecosystem. Cote-Colisson noted that Apple is expected to invest only 2.5% of 2026 estimated sales in capital expenditure, compared with 39% for hyperscalers.

The analyst also believes that Apple is well positioned to leverage its 2.5 billion installed device base through its upcoming upgraded Apple Intelligence platform. “This AI boost comes at the right moment, when we think Apple has one of its most innovative product pipelines in place,” the analyst further added.

Apple’s new agentic Siri AI will launch this year, bringing features such as visual intelligence, cross-app information access for more context-aware conversations, and enhanced interactions.

Apple has so far struggled to deliver compelling use cases for Apple Intelligence, which was first introduced in June 2024. The company is now expected to rely on foundation models derived from distilled Gemini models, running both on devices and through Apple’s private cloud infrastructure.

At the same time, the company boasts a strong hardware roadmap, including the iPhone 18 Pro and Pro Max expected this autumn, the iPhone Air planned for April 2027, and, most importantly, a book-style foldable iPhone. Cote-Colisson also expects a special 20th-anniversary iPhone edition and smart glasses in 2027. “Combined with better AI, this could trigger a strong renewal cycle for users of iPhone series 15 and 16 (2023 2024),” Cote-Colisson summed up.

Cote-Colisson now joins 18 other analysts in the AAPL bull camp, while an additional 9 Holds and 2 Sells all add up to a Moderate Buy consensus rating. However, the $328.69 average price target suggests the shares will stay rangebound for the time being. (See Apple stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.