Apple Inc. (NASDAQ:AAPL) shares are on the rise Monday, currently almost 2% above Friday's close after Loop Capital upgraded the stock to a Buy rating and set a new price target of $300, the highest on Wall Street.
Loop Capital said in a note to clients that they believe Apple is poised to become the leading platform for next-generation AI, similar to its past successes with the iPhone and iPod.
The firm's Supply Chain Analyst sees Apple solidifying its position as the go-to platform for AI, just as it did with social media 15 years ago and digital content consumption 20 years ago.
"Our $300 PT is 33x our $9.00 CY2026 EPS (what the stock will be valuing in 12 months). 33x P/E is the higher-end of AAPL’s 20x – 35x post-Covid P/E range," Loop Capital explained.
The firm's upgrade marks a turnaround from May 2023, when Loop Capital downgraded Apple to Hold due to expected reductions in iPhone production.
"This work proved to be prescient, as iPhone pressure manifested in Sep Q ’23 and that conversation lingered into Feb ’24," the analysts explained. The recent upgrade is based on their analyst's latest findings, which indicate a significant increase in iPhone 16 production driven by AI excitement.
"AAPL has an opportunity the next few years to solidify itself as consumer’s Gen AI “base camp” of choice, just as it did for social media 15 years ago (with iPhone) and digital content consumption 20 years ago (with iPod)," Loop Capital stated.
The firm believes this new trend has the potential to drive significant stock gains, just as previous technological shifts did.
Overall, Loop Capital's upbeat outlook and higher price target reflect confidence in Apple's strategic positioning and growth prospects in the evolving AI landscape.