TLDR
- Citi Research raised its price target on Apple from $315 to $365, while maintaining a buy rating
- Analyst Asia Merchant sees the September 18 iPhone launch as a major catalyst for investor sentiment
- Apple is expected to gain market share in smartphones and computers despite increasing competition
- Price increases are expected to offset margin pressures, and foldable devices are also expected to debut in the fourth quarter
- Apple is locked in a legal battle with OpenAI over alleged trade secret theft
Apple (AAPL) got a boost from Wall Street on Monday as Citi Research analyst Asiya Merchant raised her price target on the stock to $365, up from $315, while maintaining her buy rating. The stock was trading at $316.06 premarket, meaning the new target indicates an upside of roughly 16%.
The move comes ahead of Apple’s earnings report scheduled for July 30.
Apple is “well positioned” to continue gaining market share in both smartphones and computers, even as competition intensifies and the hardware market slows, Merchant said.
Much of its bullish case rests on the iPhone 18. Its September launch “represents an important catalyst that could further boost investor sentiment,” she wrote.
apple It has already moved to raise prices on some products. Merchant expects this strategy to continue into the iPhone 18 cycle, with price increases primarily focused on high-end models where she believes demand holds up better.
“While iPhone prices remain unchanged for now, we expect price increases in the upcoming iPhone launch cycle in September,” Merchant wrote.
She also pointed to the company’s loyal customer base as a buffer against any weak demand caused by higher prices.
What about Apple’s intelligence?
The merchant is not counting on Apple’s smarts to drive a major upgrade cycle in the near term. But it believes Siri’s improved capabilities will increase user engagement over time and support growth in Apple’s high-margin services revenue.
It also raised the possibility that the new Siri AI rollout could eventually come with tiered pricing, which would be another boost for the services division.
On the hardware side, Merchant expects Apple to launch foldable devices in the fourth quarter of this calendar year.
OpenAI suit
What Citi’s memo doesn’t address is Apple’s legal battle OpenAI. Last week, Apple sued its former AI partner for trade secret theft, alleging that OpenAI stole intellectual property “at every level” to develop its own hardware.
Apple’s lawyers called the lawsuit “a necessary step to expose and begin to address the widespread theft of Apple’s trade secrets.”
OpenAI responded, with a spokesperson saying the company “has no interest in other companies’ trade secrets.”
The legal dispute represents a sharp turn in what was once a close partnership between the two companies.
Apple’s next earnings report is scheduled to be released on July 30.
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