On Tuesday, Apple unveiled the iPhone 17, which includes the new iPhone Air variant.
Following its most recent iPhone launches, Apple Inc.’s stock is continuing to decline. Ben Reitzes, an analyst at Melius Research, says investors who are obsessed with the absence of general price hikes are overlooking the wider picture.
According to Reitzes, Apple (AAPL) is now “out of the woods” following the iPhone launch event and is poised for increased profits. Reitzes up his price target to $290 from $260 on Wednesday, the most among analysts surveyed by FactSet, and reaffirmed his buy rating.
On days when the iPhone is announced, Apple’s stock usually remains unchanged. It also normally declines by 2.07% between announcement and release. But according to Reitzes, the iPhone manufacturer might be headed for a robust upgrade cycle that might result in a nearly 24% upside in the upcoming year.
A larger-than-anticipated upgrade cycle is anticipated to be sparked by the iPhone 17 Air, particularly in China, where Reitzes believes the form factor will be more appealing. Additionally, Reitzes stated that the iPhone Air’s $999 starting price could “cannibalize” some of the less expensive models, shifting Apple’s product mix into higher-end phones, even though the stock fell 1.5% on Tuesday and another 3.2% on Wednesday due to news that Apple was maintaining the base model price at $799.
“What matters from the iPhone 17 launch event was that the new phones included price hikes for the key models you would want,” Reitzes stated.
Apple increased the price of the iPhone Pro model by $100 to $1,099 and released a more costly iPhone Air. With the addition of a 2-terabyte storage option, the iPhone Pro Max has become an even more expensive phone.
According to Reitzes, the new iPhones also paved the way for future innovations like a foldable phone, eyewear, and camera-equipped AirPods.
Apple’s stock has been hampered this year by a lack of an artificial intelligence strategy and tariff concerns, but the release of the new iPhone puts the company firmly on track to catch up to other Big Tech companies.
Reitzes praised the live translation features of the new AirPods Pro 3 as “awesome, proving a worthy wearables upgrade for travelers and could finally help stabilize the wearables category, which has been declining.”
Following the recent antitrust verdict that allowed Alphabet Inc.’s (GOOGL) (GOOG) Google to maintain its revenue-sharing arrangement with Apple, Reitzes is likewise projecting an upward trend for the stock. As Apple expands Apple Intelligence, the development should help prospective AI partnerships and increase Apple’s service revenue.
