Star analyst Ives: Bullish on Apple Inc. (AAPL.US) to $400, AI strategy could boost valuation by $75 per share

Star tech analyst Dan Ives said Apple Inc.'s (AAPL.US) AI strategy could add about $75 per share to the company's valuation, as the company seeks to leverage AI to drive device upgrades and increase services revenue. Ives gave Apple Inc. stock an "Outperform" rating with a $400 price target. Ives noted in his report: "Apple Inc. is entering a new phase in the evolution of its ecosystem, in which AI tightly integrates hardware, software, and services, not only driving device upgrades and increasing average revenue per user, but also leading the next phase of its growth strategy." Given Apple Inc.'s massive user base, Ives estimates that AI-related revenue could eventually account for more than 15% of services revenue. The analyst said Apple Inc.'s focus on integrating AI into its products while emphasizing privacy and on-device processing could help make the technology part of consumers' daily lives. He also expects AI to create new opportunities in areas such as health, fitness, finance, and gaming, with developers playing a role in building these services. Ives expects the iPhone 18 upgrade cycle to support Apple Inc. over the next few quarters. He estimates that about 375 million iPhones have not been upgraded in more than four years, creating a large pool of potential buyers. Ives also expects Apple Inc.'s foldable iPhone Duo to generate additional demand, estimating sales of about 10 million units over the next few quarters. Tipranks data shows that Wall Street analysts are clearly divided on Apple Inc. Among 31 analysts covering the stock, 16 rate it "Buy," 11 rate it "Hold," and 4 rate it "Sell," with a consensus rating of "Moderate Buy" and an average price target of $337.51, slightly below the latest closing price.