On Thursday, Baird maintained its positive stance on Apple Inc. (NASDAQ:AAPL) stock by raising the price target to $240, up from $200, while keeping an Outperform rating. The firm's decision is based on the company's robust ecosystem, increased services revenue, strong cash flow, and consistent innovation leadership.
The analyst noted that despite the trend of slowing upgrade rates, including recent record lows for major carriers like AT&T (NYSE:T) and Verizon (NYSE:VZ), the introduction of Apple Intelligence could serve as a significant catalyst for upgrades. This potential boost in upgrades is expected to have a meaningful impact on Apple's revenue and earnings per share (EPS) growth.
Baird has increased its fiscal year 2025 iPhone and total revenue forecasts for Apple by 9.3% and 5.9%, respectively. These revised projections are slightly above the current consensus, indicating a more optimistic view of the tech giant's financial outlook.
The analyst highlighted Apple's expanding ecosystem and the growing portion of income derived from its services as key factors in the company's continued success. The firm believes that these elements, coupled with Apple's track record of innovation, position the company well for future growth.
The upgrade in the price target reflects confidence in Apple's potential to catalyze upgrades and expand its revenue streams in the coming years. This adjustment by Baird underscores the firm's expectation of Apple's sustained performance and the anticipated positive developments in its business trajectory.
In other recent news, tech giants Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:GOOGL) recently reported disappointing earnings, causing a significant downturn in major technology stocks. Tesla's profit margin was the lowest in five years, sparking investor concern.
Alphabet's shares also dropped, despite exceeding revenue expectations, due to increased investment in AI and competitive pressures on YouTube's ad revenue. These developments have led to heightened market volatility, as reflected by the Cboe Volatility Index reaching a three-month peak.
Goldman Sachs has maintained a Buy rating on Apple shares (NASDAQ:AAPL), projecting a neutral to positive outlook for iPhone demand based on recent US wireless carrier reports. Meanwhile, Barclays has raised its 2024 projection for the S&P 500 index to 5,600, citing anticipated sustained profit growth among large technology companies.
Bernstein has also reaffirmed its positive stance on Apple, maintaining an Outperform rating and a price target of $240.00, as investor attention shifts towards the upcoming iPhone 16 release.
G20 finance ministers are discussing the advancement of a global tax agreement, "Pillar 1," aiming to replace individual digital services taxes on major U.S. technology companies with a system that redistributes taxing rights among global firms. The U.S. Treasury has urged all involved parties to conclude the Pillar 1 discussions swiftly. These are recent developments that investors are closely monitoring.
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