Investing.com-- Wedbush analysts said that the worst was over for Apple Inc (NASDAQ:AAPL) after the firm clocked better-than-feared earnings for the March quarter, with the iPhone maker’s strategy for artificial intelligence now set to determine its next phase of growth.
Wedbush said that Apple’s upcoming announcement on AI during its Worldwide Developers Conference (WWDC) in June will be closely watched, and that AI integration is also expected to drive Apple’s next wave of device sales.
Wedbush analysts wrote that Apple needed to get through the June quarter by at least meeting street estimates, and that the remaining two quarters for the year presented an opportunity for growth.
Apple’s revenue and profit fell marginally less than expected in the March quarter, although declining iPhone sales in China remained a point of contention. But Wedbush said that integration of generative AI into the iPhone will mark a “new frontier of growth” for the company’s device sales.
“We believe the worst is in the rearview mirror for Apple and now there is a massive iPhone product cycle with pent-up demand and AI now coming to Cupertino looking out over the next 6-9 months along with a $110 billion newly announced buyback in Apple's back pocket,” Wedbush analysts wrote in a note, while maintaining their outperform rating and $250 price target on the stock.
The $250 target represents a nearly 38% premium from current levels. Apple's stock is currently trading down about 2% so far in 2024.
Apple has somewhat lagged its smartphone peers in rolling out new AI features in its devices- a trend that also factored into increased competition in the country’s key markets, particularly China.
But reports have suggested that the iPhone maker is working on rolling out AI offerings, and may even partner with Alphabet Inc's (NASDAQ:GOOGL) Google to incorporate AI into its devices.
A Wall Street Journal report on Monday said that the firm was planning to develop AI chips to use in data center servers, leveraging its expertise in building in-house silicon.