Star analyst Ives: Bullish on Apple (AAPL.US) up to $400, AI strategy may increase valuation by $75 per share

According to the Zhihu Finance APP, star tech analyst Dan Ives stated that Apple (AAPL.US)'s AI strategy could increase the company's valuation by about $75 per share, as the company seeks to leverage AI to drive device upgrades and boost service revenue. Ives rates Apple stock as "Outperform" with a target price of $400.

Ives noted in his report: "Apple is entering a new phase in the development of its ecosystem, where AI tightly integrates hardware, software, and services, not only driving device upgrades and improving per-user pricing, but also leading the next stage of its growth strategy." Given Apple's large user base, Ives estimates that AI-related revenue could eventually account for more than 15% of its service revenue.

The analyst said that Apple is focused on integrating AI into its products while emphasizing privacy and on-device processing, which could help make the technology a part of consumers' daily lives. He also expects that AI will create new opportunities in health, fitness, finance, and gaming sectors, with developers playing a key role in building these services.

Ives expects the iPhone 18 upgrade cycle to support Apple in the coming quarters. He estimates that about 375 million iPhones have not been upgraded for more than four years, representing a large potential pool of buyers.

Ives also expects that Apple's foldable-screen iPhone Duo will bring additional demand, estimating that sales will reach about 10 million units over the next few quarters.

Tipranks data shows that Wall Street analysts are clearly divided on Apple. Among the 31 analysts covering the stock, 16 give a "Buy" rating, 11 give a "Hold" rating, and 4 give a "Sell" rating. The consensus rating is "Moderate Buy," with an average target price of $337.51, slightly lower than the latest closing price.