Technology

Apple will trigger a much-needed iPhone upgrade cycle when it integrates its artificial-intelligence offering, called Apple Intelligence, into the iPhone 16 this fall, DA Davidson analyst Gil Luria says in a research note. The integration may be one of the most compelling use-cases of generative AI on the consumer-side, and should drive upgrades, particularly as the backwards compatibility of Apple Intelligence only goes to the iPhone 15 Pro, the analyst says. Apple’s iPhone sales were down slightly but relatively flat in 2Q, but the iPhone 15 family is still leading the smartphone category in many key markets, Luria says. Shares rise 3% to $224.83, on a day that the overall tech sector is under pressure

Apple’s (AAPL) fiscal Q3 results and Q4 outlook are unlikely to sway investor sentiment, UBS said in a report sent Friday. “Apple bulls will continue to hang their hat on the view that the iPhone is entering a ‘supercycle’ later this year driven by GenAI and will act as an accelerant to Services growth,” the investment firm said. “On the other hand, more cautious investors will point to a reported [September revenue] guide that is not accelerating on an adjusted basis from the June [quarter],” it said. Following the “largely inline” quarterly results, UBS raised its full-year 2024 EPS forecast to $6.69 from $6.56, and fiscal 2025 EPS at $6.88 versus its previous estimate of $6.86. UBS is projecting iPhone shipments totaling 51 million units in the September quarter, up 4% year over year and largely in line with consensus of 50.7 million units. That would account for about 23%

Apple (AAPL) posted a “modest beat” for fiscal Q3 revenue and earnings, supported by strength across most divisions, and projected Q4 gains in iPhone and service segments signal “the best is yet to come,” BofA Securities said Thursday in a report. Results on from Q3 showed “growth accelerated in iPhone, iPad and wearables and across regions,” while guidance for the September quarter was “conservative,” BofA said. “We see upside in iPhones/Services given the upcoming launch of iPhone 16 with Apple Intelligence,” BofA said. “We further see the potential for significant acceleration of units in the December quarter and overall in FY25 with the rollout of Apple Intelligence.” BofA reiterated its buy rating on Apple, citing “potential for consensus estimates to be revised higher given multiyear iPhone upgrade cycle, tailwinds to gross margins and strong cash flows.” BofA kept its $256 price objective on Apple stock. At least four other analysts

Apple (AAPL) is looking to ship at least 90 million iPhone 16s in the second half of the year, driven by demand for the AI services from its new lineup, Bloomberg reported Wednesday. The company told partners and suppliers that it’s aiming for about 10% growth in shipments of new iPhones compared to their predecessors, a person familiar with the matter told Bloomberg. Apple shipped about 81 million iPhone 15s in the latter half of 2023. Apple expects the addition of new artificial intelligence tools to drive demand for iPhone 16 when it launches later this year. Earlier today, the company said it would include Microsoft-backed (MSFT) OpenAI’s ChatGPT into upcoming updates of iPhones as part of upgrades called Apple Intelligence.

Artificial intelligence may be the phrase of the moment in big tech, but Apple has a giant opportunity in advertising, some analysts say. Needham analysts Laura Martin and Dan Medina raised their price target on Apple stock to $260 from $220, and reiterated a Buy rating on Wednesday. They cited the company’s $110 billion share-repurchase authorization, while peers are devoting dollars to Generative AI instead. “However, over a three-year time frame, Apple’s single-digit revenue-growth rate feels increasingly at risk to us,” analysts wrote. “We believe that Apple should build an advertising business, just as Amazon.com has done.” The team offered a few reasons Apple should jump into advertising. First, total global ad spending this year will be $966 billion, and mobile advertising will be $500 billion, dwarfing the consensus call for Apple’s 2024 revenue of less than $400 billion. Second, ad margins tend to be 70% to 80%, which would