Apple (AAPL) saw a “strong demand start” for iPhone 16 over the weekend, reinforcing Wedbush Securities’ view that the technology giant will be able to break its historical mark for iPhone units in a year and reach a market capitalization of $4 trillion in 2025.
The brokerage estimates iPhone 16 sales to be up high single digits and potentially double digits beginning with the December quarter, it said in a Sunday client note. Wedbush believes Apple’s highly anticipated artificial intelligence features for the new iPhone will be released in phases over the coming months.
“This is the beginning of an AI driven iPhone supercycle that should enable Apple to break its historical mark for iPhone units in a year and translate into a $4 trillion market cap for Cupertino in 2025,” Wedbush analysts led by Daniel Ives wrote in the note.
Based on the brokerage’s recent Asian supply chain checks, it expects this iPhone 16 upgrade cycle to be more than 90 million units initially and be up about 8 million to 10 million units from the iPhone 15, with demand “tracking well” so far globally. The company could sell over 240 million units in fiscal 2025, buoyed by a robust December quarter and demand, according to Wedbush.
Apple is also focused on the iPhone upgrade cycle in its key China market, with potential sales of roughly 50 million units in fiscal 2025, the firm said. Wedbush also anticipates more partnerships for Apple in China for large language models around Baidu (BIDU) in the coming months.
“We believe over 20% of (the) world’s consumer population will ultimately interact with AI through an Apple device over the coming years,” according to Ives. The brokerage expects developers to build “hundreds of” generative AI-driven apps for Apple devices over the next six to nine months.
Wedbush maintained its outperform rating on Apple’s stock and 12-month price target of $300.