On Thursday, BofA Securities maintained a positive outlook on Apple Inc. (NASDAQ:AAPL), reiterating a Buy rating and a $230.00 stock price target. The firm's analysis is based on data indicating that Apple's App Store revenues have shown significant growth. For the third fiscal quarter, after 66 days, the App Store's revenues rose to $5.4 billion, marking an 11% increase year over year. This figure is derived from developer revenues as reported by SensorTower.
Despite the revenue growth, the total number of downloads for iPhone and iPad combined remained consistent with the previous year's figure at 5.8 billion. In a more focused look at the month of May, the App Store's revenue saw a 12% global year-over-year increase, with China contributing a 10% year-over-year increase.
Further analysis by BofA Securities highlighted that the dollars earned per App Store download had also increased by 11% year over year during the first 66 days of the third fiscal quarter of 2024. The firm's stance on Apple's stock is reinforced by expectations of a multi-year upgrade cycle, potential gross margin improvements, and sustained growth in services.
The price objective set by BofA Securities remains pegged to a 30x multiple on the estimated calendar year 2025 earnings per share (EPS) of $7.76, underpinning the $230 target. This valuation reflects confidence in Apple's continued financial performance and market position.
In other recent news, Apple Inc. has been the focus of several analyst reports. DA Davidson maintained a neutral stance on Apple with a stock price target of $200, in anticipation of the upcoming Worldwide Developer Conference (WWDC). The firm expects potential integration of generative AI into Apple's products, which could influence future revenue and earnings.
Meanwhile, Citi has maintained a Buy rating and a $210.00 stock price target for Apple, emphasizing the company's potential in the artificial intelligence (AI) landscape. Evercore ISI also maintained an Outperform rating and a $220.00 stock price target for Apple, following an increase in App Store revenue growth.
On the other hand, Nvidia (NASDAQ:NVDA), a leading AI chipmaker, is nearing a market valuation of $3 trillion, potentially surpassing Apple to become the world's second most valuable company. This comes ahead of Nvidia's scheduled ten-for-one stock split and is driven by a high demand for its advanced processors.
Despite these developments, Apple continues to lead as the most valuable U.S. brand in 2024, with a brand value of $516.58 billion, significantly ahead of Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL). These recent developments reflect the dynamic and evolving landscape of the technology sector.
InvestingPro Insights
The optimistic view of BofA Securities on Apple Inc. (NASDAQ:AAPL) is complemented by several metrics and insights from InvestingPro. With a market capitalization of a staggering $3.01 trillion USD and a P/E ratio of 30.44, Apple stands as a financial behemoth in the tech industry. The slight dip in revenue growth over the last twelve months, at -0.9%, might raise some eyebrows, but the company's gross profit margin remains robust at 45.59%, showcasing its ability to maintain profitability.
InvestingPro Tips indicate that Apple has been a consistent performer, raising its dividend for 12 consecutive years—highlighting its commitment to shareholder returns. Moreover, the tech giant operates with a moderate level of debt, which is a reassuring sign for investors concerned about financial stability. However, some analysts have revised their earnings downwards for the upcoming period, suggesting that investors should keep an eye on the next earnings date set for July 24, 2024.
For those considering an investment in Apple, using the coupon code PRONEWS24 will provide an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, where there are 17 additional InvestingPro Tips available to guide your investment decisions.
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