JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Investing.com -- Evercore ISI lifted its price target for Apple shares (NASDAQ:AAPL) to $275 from $260 in a note Tuesday, maintaining an Outperform rating on the stock.
The firm emphasized the company’s positioning to benefit from AI monetization without the heavy investment in GPUs required by competitors.
The firm’s analysts see multiple monetization opportunities emerging over time, reinforcing Apple’s status as a "Tech Staple" capable of delivering mid-single-digit revenue growth and low-to-mid-teens EPS and free cash flow (FCF) growth over the next several years.
According to Evercore ISI, investors focus too much on iPhone growth. “While investors over-index on iPhone growth, we think there is less of a focus on AAPL’s ability to keep growing EPS & FCF growth consistently via. gross margin (mix and pricing), Operating leverage and buybacks,” they wrote.
The firm highlights several key growth initiatives, including emerging markets, Apple Intelligence, healthcare, advertising, and payments, each of which could provide meaningful contributions to Apple’s financial performance.
“AAPL is positioned to benefit from AI monetization without having to invest their FCF into GPUs, we see monetization occurring on multiple fronts over time,” adds Evercore.
The report outlines growth vectors for the iPhone, particularly in India and other emerging markets, where demand continues to rise.
Analysts also see services revenue growing at 12%+, with higher ARPU and new offerings underappreciated by the market. The wearables segment remains another area of potential upside, with further penetration expected.
Evercore ISI also conducted an in-depth gross margin analysis, revealing multiple levers for upside, and assessed key regulatory risks that could impact Apple.
The firm believes Apple can sustain or even expand its current valuation, citing strong FCF generation and the company’s commitment to returning 100% of it to shareholders.
Evercore’s bull case scenario values Apple at $375, reflecting optimism around the company’s continued ability to generate consistent growth with relatively low volatility compared to other major tech firms.