Analysts overhaul Apple stock price targets after record Q1 earnings
Apple shares powered higher in early Friday trading, following a record set of first quarter earnings and an upbeat outlook for iPhone sales from the world’s biggest tech company that triggered a host of price target changes from analyst on Wall Street.
Apple (AAPL) posted its highest-ever revenue total for the three months ending in December, its fiscal first quarter, with a topline tally of $124.3 billion that came even amid a slightly disappointing performance in terms of iPhone sales.
The flagship smartphone generated revenues of $69.14 billion, a 15% increase from the prior year, but lagged Street forecasts and the uneven rollout of the group’s Apple Intelligence AI features. That left some investors concerned that iPhone sales could suffer over the coming months.
Apple CEO Tim Cook, however, noted that the group saw record upgrades over the quarter, largely as a result of the Apple Intelligence rollout.
“We saw that in markets where we have rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available,” Cook told investors on a conference call late Thursday.
“Apple Intelligence opens up an exciting new frontier and is already elevating experiences across iPhone, iPad, and Mac,” Cook added. “We’re going to keep investing in innovation and in transformative tools that help users in their everyday lives.”
Apple also posted a record bottom line of $2.4 per share,
Finance chief Kevan Parekh, meanwhile, said Apple’s current quarter revenues would likely rise in the “low to mid single digits”, in terms of percentage gains. That likely translates to between $91.7 billion and 95.3 billion, when compared to the same period last year, and falls largely in-line with Wall Street’s estimates.
Apple Intelligence starting to pay off
“Apple Intelligence is clearly benefiting iPhone growth in regions/countries where it is available,” said D.A. Davidson analyst Gil Luria. “And while it is still being rolled out slower than initially anticipated, new regions will have their hands on Apple Intelligence soon, along with new features for existing users.”
“And so while iPhone growth came in lower than expected, we remain optimistic on the outlook for iPhone upgrades as Apple Intelligence is proving to be a compelling reason for users to buy a new smartphone,” said Luria, who lifted his price target by $30 to $290 per share following last night’s update.
Citigroup analyst Atif Malik, who lifted his stock price target by $20, taking it to $275 per share following last night’s update, said Apple Intelligence is “demonstrating its upgrade potential.”
Related: Goldman Sachs analyst tweaks Apple stock price target ahead of Q1 earnings
“While Apple is behind on AI and catching up with a staggered Apple Intelligence rollout, we believe its focus on end-to-end AI security—from silicon to private servers—is underappreciated,” he said. “Additionally, the recent DeepSeek breakthrough, offering lower cost per compute and optimized models running locally, could help accelerate AI adoption on devices.”
Mac, iPad sales see solid gains
Atif Malik also said he sees the releaser of the lower-priced iPhone SE4, slated for March, and the new Apple Intelligence software update in April as likely positive catalysts for the stock.
The relatively muted Apple iPhone sales were offset by solid gains for Apple Services, which includes AppleTV, ApplePay and Apple Music. The Division saw revenues rise 13.9% from the year-ago period to $26.34 billion.
Mac and iPad sales, which boast new chips made in-house by Apple itself, also topped Wall Street forecasts and came in at $8.99 billion and $8.06 billion respectively.
“We believe we’ve got the best AI PC out there for running workloads. The silicon in the Mac is, and it has been for several years now, designed by us and really designed for these workloads,” said Cook. And so, I don’t want to project at the category level for the future, but we’re incredibly pleased with both the Mac and the iPad for the quarter.”
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Other price target changes include Morgan Stanley’s Erik Woodring, who lifted it by $2 to $275 per share, and Jefferies analyst Edison Lee, who nudged his $1.58 higher to $202.33 per share.
KeyBanc Capital Markets analyst Brandon Nispel, however, “continues to see downside risks” to Apple shares even with the stronger-than-expected revenue gains from its services business and the upbeat outlook from Cook last night.
Citing “the lack of a U.S. upgrade cycle; China competition; and an unlikely inflection across all products/geographies” Nispel reiterated his ‘underweight’ rating and $200 price target.
Apple’s ‘AI revolution’
Wedbush analyst Dan Ives, however, argued that Apple’s place in the AI investment thesis will likely take longer to establish, but will still be compelling given its massive installed base.
“The Nvidia AI revolution essentially happened overnight … Apple’s AI consumer revolution will happen over the course of 12-18 months and with almost 2.4 billion iOS devices, including 1.5 billion iPhones, this speaks to our firm bullish thesis,” he said.
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Ives, a longtime Apple bull, held his ‘outperform’ rating and $325 price target in place after last night’s earnings, which he called “a clean quarter for Apple that marks the beginning of a multiyear upgrade cycle from iPhone 16 to iPhone 17.”
Apple shares were last marked 4.1% higher in premarket trading to indicate an opening bell price of $247.29 each.
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