UPDATE: Bank of America has issued a bullish outlook on Apple (AAPL) stock just ahead of a crucial earnings report scheduled for January 29. The bank’s positive stance follows a landmark partnership with Google that significantly enhances Siri’s capabilities through advanced AI integration.
This development is critical as it positions Apple to capitalize on surging demand for the iPhone 17 and a robust growth forecast in its Services segment. Bank of America analysts predict that these factors will lead to a strong December quarter, projecting sales of $140 billion and earnings per share of $2.69, both surpassing market expectations.
The partnership with Google, announced on January 12, allows Apple to utilize Gemini AI models, fundamentally transforming Siri and addressing previous concerns regarding Apple’s AI advancements. Daniel Ives from Wedbush Securities describes this deal as a “major validation moment” for Apple, setting the stage for significant AI-driven growth this year.
Bank of America maintains a strong buy rating on Apple, with an unchanged price target of $325, suggesting nearly 25% upside from current levels. Analysts have raised iPhone unit sales expectations to 85 million for the December quarter, reflecting a remarkable 17% year-over-year increase. Services revenue is expected to grow by 13%, despite challenges in the Chinese App Store.
As Apple gears up for its earnings call, the focus is on the anticipated launch of a foldable iPhone later this year, which could further boost sales and renew institutional interest. However, analysts caution that execution risks remain, especially as the partnership with Google could invite regulatory scrutiny and impact Apple’s operational flexibility.
The stakes are high for Apple as Siri serves as a vital gateway within its ecosystem, processing a staggering 1.5 billion requests daily. This partnership not only enhances Siri’s functionality but also strengthens Apple’s overall services, which generated $28.75 billion in sales in the September quarter alone.
In summary, Bank of America’s renewed optimism about Apple stock comes at a pivotal moment, with strong demand for the iPhone 17 and a transformative AI partnership with Google poised to reshape the company’s future. Investors are closely watching the upcoming earnings report for further insights into Apple’s performance and growth trajectory.
