Apple (NASDAQ:AAPL) stock had been languishing in the red for most of the year burdened by its modest AI game and exposure to tariffs, but that is no longer the case.
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The stock has erased the losses and tilted into the green after reports the latest iteration of its flagship product, the iPhone 17, is off to a flying start.
According to Wedbush analyst Daniel Ives, so far, units appear to be tracking 10%-15% ahead of the iPhone 16. Supply checks in Asia suggest production of the base iPhone 17 and Pro models could rise by about 20%. Meanwhile, the new iPhone Air could turn out to be the standout of this Apple upgrade cycle, based on Ives’ numerous weekend store visits and conversations with customers. Monitoring shipping times, the analyst is also noticing especially strong demand for iPhone 17 Pro models. “Heading into this iPhone 17 cycle we were expecting this upgrade cycle to be a good, but not great one,” the 5-star analyst went on to say. “Instead the combination of a pent-up consumer upgrade cycle with our estimates of 315 million of 1.5 billion iPhones globally not upgrading their iPhones in the last 4 years, coupled with some design changes/enhancements have been the magical formula out of the gates.”
Ives thinks China demand will be crucial for the iPhone 17 upgrade cycle, expecting the negative growth trends of recent years to reverse, thereby driving “positive growth” in FY26. Although the iPhone Air launch in China is delayed due to regulatory approval for the eSIM, Ives anticipates this issue to be resolved within the next month, allowing it to reach stores and online platforms.
Looking at the wider picture, Ives sees this as a critical moment for Apple to boost growth in China, even as strong domestic competition from Huawei and Xiaomi presents a “formidable headwind.” The analyst also thinks that amid tensions between the US and China over trade negotiations, TikTok, and Nvidia chip sales, it’s crucial for Apple to capitalize on this opportunity after several frustrating years in China, where weak demand has overshadowed the story.
That said, there is still the “elephant in the room” that needs to be addressed and that is the “invisible AI strategy.” With the world’s largest consumer installed base – 2.4 billion iOS devices and 1.5 billion iPhones – Apple is well positioned to accelerate its AI initiatives through external partnerships. After Google and Apple’s major win in Google’s antitrust case, Ives thinks it will result in Apple “doubling down” on an AI-related partnership with Google Gemini, integrating it deeper into the iPhone ecosystem. “We believe the AI monetization piece could add $75 to $100 per share to the Apple story over the coming few years as it finally plays out after a very disappointing WWDC this past June,” the 5-star analyst summed up. “We believe no ‘AI premium’ is factored into Apple’s stock at current prices which makes this a compelling large cap tech name to own into year-end and 2026.”
To this end, Ives maintained an Outperform (i.e., Buy) rating on the shares and raised his price target from $270 to a Street-high of $310, suggesting the stock will gain 21% from hereon in. (To watch Ives’ track record, click here)
16 other analysts join Ives in the bull camp and with an additional 14 Holds and 2 Sells, AAPL stock claims a Moderate Buy consensus rating. However, going by the $250.17 average target, shares will stay rangebound for the time being. (See Apple stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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