Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, JPMorgan analysts reiterated their Overweight rating on Apple (NASDAQ:AAPL) stock, maintaining a price target of $240. With Apple trading at $201.70 and analyst targets ranging from $170.62 to $300, the stock appears overvalued according to InvestingPro Fair Value metrics. The analysts noted that investor expectations are set for a modest Worldwide Developers Conference (WWDC) as Apple continues to work on features promised in last year’s event.
The analysts highlighted that anticipated announcements at WWDC include expanded distribution and integration of third-party AI large language models (LLMs) beyond ChatGPT. These developments are seen as incremental, with Apple still trailing other major tech companies in AI advancements. Despite these challenges, Apple maintains a GOOD Financial Health score on InvestingPro, supported by its $400.37 billion in revenue over the last twelve months.
Apple is expected to showcase expanded AI capabilities at the conference, aiming to reassure investors about its growing relevance and improved position in AI. The analysts believe potential surprises could involve specific timelines for upgraded Siri features in North America by 2026 or the announcement of Apple Intelligence in China, although these are considered less likely.
The expected announcements include enabling third-party app developers to access on-device AI LLMs, integration with Google (NASDAQ:GOOGL) Gemini alongside ChatGPT, and reiterating AI feature integrations across Siri and native apps. These enhancements are largely anticipated to be incremental.
In other recent news, Apple has reported significant growth in its App Store revenue, with a 13% increase in May following a 12% rise in April. This growth has been highlighted by Evercore ISI, which maintained an Outperform rating and a $250 price target for Apple, noting the U.S. market’s notable 10% revenue increase. Similarly, Goldman Sachs reiterated a Buy rating with a $253 price target, emphasizing that the App Store’s performance exceeded their and FactSet’s projections for the company’s third-quarter services revenue growth. Citi also maintained a Buy rating with a $240 price target, as anticipation builds for Apple’s Worldwide Developers Conference, which is expected to reveal significant software updates.
In other developments, the China Academy of Information and Communications Technology reported a 0.8% year-on-year increase in shipments of foreign-branded mobile phones, including Apple’s iPhones, in April. This suggests a slight growth in demand for Apple’s products in the Chinese market. Meanwhile, geopolitical tensions have impacted broader market sentiment, with Apple being one of the ’Magnificent Seven’ stocks experiencing a decline in premarket trading amid global trade uncertainties.
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