Apple iPhone 17, AI initiatives key as company approaches $4T market cap club: Wedbush

[New iPhone 17 Models Go On Sales At Apple Stores Across The Country]
Michael M. Santiago

Wedbush highlighted strong demand for Apple's (NASDAQ:AAPL [https://seekingalpha.com/symbol/AAPL]) iPhone 17 and AI initiatives as key while the company marches towards the $4T market cap club.

"With Apple on the doorstep of joining Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) in the $4 trillion market cap club its clear to us that Cook & Co. has finally found success with iPhone 17 and now the Street awaits for the grand strategic AI roadmap to be unveiled," said analysts led by Daniel Ives.

The analysts noted that Apple will announce its fourth quarter results on Oct. 30 with the Street focused on Cupertino delivering improving headline metrics with the rebound in iPhone sales across the U.S. and China with the better than expected iPhone 17 product cycle accelerating into early 2026.

"Our recent Asia checks have showed strong iPhone demand globally this quarter with further improvement in the China market, which is a key theme for Apple as this core region has been a persistent growth headwind over the past year and now reversing in a positive direction," said Ives and his team.

The analysts believe the Street’s top-line estimate of about $102B is beatable due to the strength of the iPhone 17 cycle out of the gates, with more consumers looking to buy the new iPhone lineup combined with the company’s double-digit services growth, which is also expected to provide an incremental uplift to Street estimates.

In addition, Ives and his team said that the recently launched iPhone Air is seeing stronger than expected demand, with the device selling out within minutes of launching across multiple cities in China, which speaks to the popularity of Apple's thinner and more affordable model in one of its key markets despite seeing high competition in the region.

"We believe that the Street is still underestimating the iPhone 17 cycle that we are seeing front and center with our estimates of 315 million of 1.5 billion iPhones globally not upgrading their iPhones in the last 4 years," the analysts added.

Talking about Apple's AI strategy, the analysts said, "the elephant in the room remains the invisible AI strategy, with the biggest consumer installed base in the world of 2.4 billion iOS devices and 1.5 billion iPhones, the time is now for Apple to accelerate its AI efforts through outside partnerships."

"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. 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," the analysts noted.

Wedbush maintained its Outperform rating and $310 price target on Apple's stock. The U.S. tech giant also remains on the Wedbush Best Ideas List and the Ives AI 30 list.

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