Bank of America thinks Apple can recover from its slow 2024 start and notch big gains going forward. Analyst Wamsi Mohan upgraded the iPhone maker to buy from neutral. He also raised his price target to $225 per share, which implies 23% upside from Wednesday’s close. Shares rose more than 1% in the premarket following the call. “We upgrade Apple to Buy from Neutral, given: 1) stronger multi-year iPhone upgrade cycle driven by need for the latest hardware to enable Generative AI features to be introduced in 2024/2025 (large part of installed base still on iPhone 11), 2) higher growth in Services as Apple better monetizes its installed base,” the analyst wrote Thursday. Mohan noted he expects Apple to implement AI features in its iOS 18 operating system later this year. He also said the Vision Pro headset “could surpass iPad revs over time as spatial computing takes hold offering differentiated use cases driving services upside.” The Vision Pro headset, unveiled last year , will launch Feb 2. in the U.S. and is priced at $3,500 . Mohan also raised his iPhone unit sales estimates for fiscal 2024, 2025 and 2026, citing excitement around the prospect of AI-enabled phones for the company. He also said recent checks “suggest higher iPhone production in Dec and potentially lower in March but no aggregate material order changes,” adding that “China weakness is largely offset by strength in other countries.” AAPL YTD mountain Apple in 2024 Apple shares have been under pressure in early 2024, losing more than 5% after rallying 48% last year. Those declines were driven in part by downgrades from Piper Sandler and Barclays . The former cited worries around valuation, while the latter said iPhone, Mac, iPad and wearable device sales volumes were weakening. Still, BofA thinks the positives outweigh the negatives, noting the stock is still attractively valued relative to the S & P 500. The bank also said the tech company’s “recent relative underperformance suggests many risks baked into expectations.”
