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Investing.com -- Moffett Nathanson upgraded Apple to Neutral from Sell, saying several threats that had pressured the stock, from a resurgent Huawei in China to tariff worries and a U.S. court case over Google payments, have largely receded, leaving valuation as the main overhang.
For much of this year, the brokerage argued Apple shares did not reflect mounting risks. Its new artificial intelligence push had failed to spark an iPhone “super cycle.”
Anti-American sentiment and Huawei’s comeback had chipped away at Chinese market share, and regulators in Europe challenged Apple’s lucrative services model.
More critically, analysts warned that U.S. tariffs and a looming court decision could upend roughly 20% of Apple’s operating profit tied to payouts from Google.
“Bit by bit, (almost) all of these risks have fallen away,” Moffett analysts said.
Discounts in China have helped stem share loss concerns, exemptions have shielded Apple from most tariff penalties, and Judge Amit Mehta’s remedy ruling this week left Apple’s Google payment arrangement largely intact despite having earlier declared it unlawful.
Moffett said Apple remains expensive at more than 30 times projected 2026 earnings and still faces challenges in building out competitive AI tools. But with worst-case scenarios no longer in play, the analysts said a bearish call cannot rest on valuation alone.
“We don’t believe that a sell thesis solely supported by valuation concerns is justified,” they wrote, setting a $225 price target on the stock.