Citi raised its target price for Apple stock. What does the investment bank bet on?

Citibank reiterated its Buy recommendation on Apple shares and raised its price target on them by 5%. One of Wall Street's largest investment banks cited higher-than-expected demand for the iPhone 17 lineup and the beginning of a period of mass device upgrades by owners of iPhone 12 and 13, purchased during the pandemic.

Citi raised its target price for Apple shares on a one-year horizon from $315 to $330 a share, citing a December forecast by analysts at IDC that Apple's "phenomenal success of the iPhone 17" will result in record shipments of smartphones in 2025, CNBC reports.

Citi analyst Atif Malik noted the continued shortage of the base model in the US, China, India and the UK two months after the iPhone 17 launch: wait times are now around 10 days, contrasting with the "near-instant" availability of last year's lineup at the same stage. "As iPhone 12/13 [model users who likely purchased smartphones in the] COVID 2020-2021 period enter the refresh window, we continue to see upside potential for iPhone 17 sales in the December and March quarters," Investing.com quoted Ma's research note as saying.

As a factor of long-term growth, the Citi analyst singled out Apple's transition to a new chip layout technology in 2026. This, he believes, should improve device efficiency and enable processing of resource-intensive AI tasks directly on smartphones rather than in the cloud. "We are optimistic about calendar year 2027 (Apple's fiscal year is not the same as the calendar year. - Oninvest), given the new layout architecture and expectations of major design changes for the 20th anniversary of the iPhone," Ma said.

On Dec. 8, Wedbush Securities analyst Dan Ives, known as one of Wall Street's most optimistic experts on Apple, raised his target price on the company's stock by 9%, from $320 to $350 a share. According to Ives, the iPhone maker is finally starting to build out a full-fledged artificial intelligence strategy that has so far been overlooked, and the AI partnership with Google will give the stock price a boost. Apple's stock valuation does not yet include an "AI premium," making it an attractive asset for the end of this year and into 2026, Wedbush said.

In December, targets on Apple shares were also raised by Evercore ISI (from $300 to $325, Outperform rating; Buy recommendation), MoffettNathanson (from $225 to $234, Neutral rating; Neutral) and Loop Capital (from $315 to $325, Buy rating; Buy). JPMorgan Chase, the largest U.S. bank, and UBS, Switzerland's largest bank, reaffirmed their ratings for Apple (Buy and Neutral, respectively) and target prices ($305 and $280).

Overall, Wall Street remains moderately positive on Apple: according to FactSet, the consensus on the stock has been "above market" (Overweight) for the past three months. 31 experts recommend buying the stock (Buy and Overweight ratings), 16 analysts take a wait-and-see stance (Hold rating), and only four advise selling (Sell and Underweight ratings). The average target price of Apple shares is $290.4 - 4.8% higher than the current quotes.

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