"Apple is well-prepared for AI adoption": Wall Street awaits strong report

Apple has received several upgrades from Wall Street analysts ahead of its quarterly report scheduled for October 30. Investment banks note that the company is gradually introducing AI features into its operating system and expect the trend to continue. Apple shares have added just 5% since January, setting their first price record in 2025 on Monday, October 20. As a result, the company has climbed to second on the list of the most expensive by capitalization. Analysts expect further AI adoption to push the market value above $4 trillion.

Analyst Michael Ng of Goldman Sachs raised his target price on Apple shares from $266 to $279, CNBC reports. The new benchmark is about 6% above the closing level of trading on Tuesday, October 21. Ng also reiterated a buy recommendation on the company. The analyst expects Apple to report earnings per share of $1.81 on revenue of $103.5 billion in its upcoming quarterly report, while the Wall Street consensus forecast calls for earnings of $1.77 per share and revenue of $101.8 billion.

According to Goldman Sachs, revenue growth from the services business, a key metric investors are focused on, should remain strong despite an expected slowdown in App Store sales growth. The analyst expects it to be 10% versus 13% in the previous quarter. But he predicts solid double-digit growth in iCloud+, AppleCare+, Apple Pay and other subscription services.

The investment bank also expects strong performance from Apple in fiscal 2026, which began in October. "We expect continued strong demand for the iPhone, helped by both competition among U.S. mobile carriers and form factor changes - including the expected launch of the foldable iPhone 18," the Goldman analyst wrote.

Wells Fargo's Aaron Rakers raised his target on Apple stock from $240 immediately to $290, suggesting upside potential of 10%. He, too, recommends the iPhone maker's stock to buy. Rakers predicts the company will report quarterly earnings per share of $1.79 and revenue of $102.4 billion.

According to him, the main focus of investors is now on Apple's AI strategy - the market has long feared that it has fallen behind its competitors. However, the analyst is confident that the company will still be able to capitalize on the AI trend. "Given its strong ecosystem and proprietary intuitive design, Apple is well-positioned to seamlessly integrate more powerful and personalized AI features into its devices - in other words, to actually make AI mainstream," Rakers wrote in a note cited by CNBC.

The analyst reminded that Apple introduced many small AI features in the new versions of its operating systems, which were released in September. These include live translation, visual analytics, new features in messages and calls, for example. He also noted that the expected quarterly results will bolster investor confidence in Apple's ability to sustain double-digit growth in services revenue over the long term.

"Now that Apple is one step away from joining the club of companies with a $4 trillion capitalization, it's clear to us: Cook and his team have finally succeeded with the iPhone 17, and now the market awaits the unveiling of Apple's massive AI strategic roadmap," Wedbush analyst Dan Ives wrote on Monday, his note quoted by CNBC.

"We believe the market continues to underestimate the iPhone 17 sales cycle. We estimate that 315 million of the 1.5 billion iPhone owners worldwide have not upgraded their devices in the past four years," Ives added.

The target price set by him implies growth of quotations by almost 18.2%.

Apple shares set their first price record this year after their rating was upgraded by Loop Capital. Senior analyst Ananda Barua raised it from neutral to a "buy" recommendation and also sharply revised the target price from $226 to $315. That became the highest target on Wall Street. "While the market is already pricing in some outperformance of sales expectations for the iPhone 17 lineup, we believe the potential for outperformance remains through at least the end of calendar year 2027," Barua wrote.

This article was AI-translated and verified by a human editor