BofA notes that iPhone has been the highest contributor to Apple’s (AAPL) annual gross profit dollars for years, but estimates that services will overtake iPhone and contribute 42% of annual gross profit dollars, versus iPhone at 41%, in FY25. Services has been, and the firm expects will continue to be, the leading driver of year-over-year gross profit dollar growth and BofA argues that Apple “deserves a higher multiple” since services revenues are secular and less cyclical. The firm reiterates a Buy rating and $250 price target on Apple shares.
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