Apple (AAPL) grabbed headlines with its annual product launch this week in California. However, AAPL stock slid more than 3% on Wednesday as investors reacted to the event’s lack of major AI announcements. Despite the dip, Melius Research’s four-star-rated analyst Ben Reitzes remains bullish, lifting his price target to a Street-high $290.
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Notably, CEO Tim Cook unveiled the iPhone Air at the launch event, calling it the company’s slimmest handset yet and a “game changer.”
Melius Stays Confident on AAPL
Reitzes believes Apple is officially “out of the woods” and new iPhones will drive stronger revenue, setting the stage for significant upside ahead.
He notes that the new $999 iPhone Air will likely draw buyers away from cheaper $799 models, boosting Apple’s overall profit mix. The phone’s fresh design could also lift market share in China and other regions, even if U.S. demand stays cautious.
Reitzes adds that investors may be overlooking Apple’s valuable partnership with Google (GOOGL), which can keep paying to remain the default search engine after a recent antitrust ruling. For context, Google gives Apple a share of its ad revenue from searches done on Apple devices. He sees the Google ruling as positive and expects Apple to earn more than earlier forecasts from search revenue and potential AI partnerships.
Morgan Stanley Also Bullish on New iPhone
Following the event, Morgan Stanley analyst Erik Woodring also reiterated his Buy rating on AAPL stock. He was more impressed than expected with the iPhone Air’s design and features, noting it could drive higher upgrade rates over the next 12 months.
However, Woodring cautioned that the eSIM-equipped device may see limited sales in China due to local eSIM regulations.
Is Apple a Good Stock to Buy Now?
On TipRanks, AAPL stock has a consensus Moderate Buy rating among 31 Wall Street analysts. That rating is based on 15 Buys, 14 Holds, and two Sells assigned in the last three months. The average AAPL price target of $242.27 implies 7% upside from current levels.
