A Bull Says Apple Bears Missed Out on More Than $1 Trillion in Stock Gains

Apple Inc.'s critics and bearish analysts have largely underestimated the company’s remarkable upward trajectory, missing out on a $1 trillion gain in its stock value. According to Wedbush analysts, this oversight stems from underappreciating three critical dynamics driving Apple’s sustained growth.

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Apple boasts an unparalleled installed base of over 2 billion iOS devices, including 1.5 billion iPhones, according to a Friday note by Wedbush analysts led by Dan Ives, a well-known Apple bull.

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Of these, approximately 300 million devices are within the upgrade window, creating a significant opportunity for Apple to drive revenue growth.

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This massive user base provides Apple with a unique advantage in maintaining customer loyalty while monetizing its ecosystem.

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Apple’s services segment, valued by Wedbush at $2 trillion, continues to enhance its ability to monetize its vast customer base.
The services division includes offerings such as iCloud, Apple Music, and the App Store, which have become integral to the daily lives of consumers worldwide.
This steady growth underscores the increasing importance of recurring revenue streams for the company’s financial performance.

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Wedbush analysts also highlight Apple’s strategic positioning in the consumer artificial intelligence (AI) space.
With over 20% of the global population expected to engage with AI through Apple devices in the coming years, the company is poised to become a key player in the AI ecosystem.

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“Consumer AI will flow through Apple’s ecosystem,” the analysts noted, emphasizing the company's potential to leverage AI advancements to enhance user experiences across its products.

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iPhone 16: A Growth Catalyst

The analysts predict that the success of the iPhone 16, coupled with a strong holiday season, will act as a launching pad for renewed growth over the next 12 to 18 months.

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Wedbush maintains an outperform rating on Apple stock, with a 12-month price target of $300—a figure approximately 28% above its current price and the highest among the 52 analysts covering the stock, per data.

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Apple introduced its next-generation iPhone 16 lineup in early September, showcasing innovative features powered by generative AI.

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In October, the company rolled out Apple Intelligence, a suite of AI capabilities, to the iPhone 16 and select high-end iPhone 15 models through iOS 18.1 updates.

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Looking ahead, iOS 18.2 is expected to launch next week, bringing a suite of enhanced AI features, including ChatGPT integration and tools like Visual Intelligence and an image playground.
Ives noted that global demand for the iPhone 16 has so far been in line with, or slightly exceeding, expectations.

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However, Apple Intelligence has yet to launch in China and several other regions.

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Wedbush expects this rollout to begin in April 2024, likely in collaboration with a Chinese tech partner, further catalyzing growth in this key market.

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Wedbush analysts remain optimistic about Apple’s long-term prospects, predicting a multi-year journey centered on AI integration. This strategy is expected to shape the company’s future, driving innovation and opening new revenue streams.

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The analysts project that Apple could sell over 240 million iPhone units in fiscal 2025, which would represent the highest annual sales in the company’s history.
This robust performance would underscore the enduring appeal of Apple’s flagship product and its ability to sustain growth even as the smartphone market matures.

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As of Friday, Apple’s stock was slightly higher in premarket trading.
Year-to-date, the stock has risen 22%, compared to the S&P 500’s 25.8% gain during the same period. Apple’s market valuation now exceeds $3.5 trillion, solidifying its position as the world’s most valuable company.

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Conclusion

Wedbush analysts argue that Apple’s massive installed base, thriving services business, and strategic focus on consumer AI have positioned it for sustained growth.
The success of the iPhone 16 and forthcoming advancements in AI integration are expected to drive momentum in the near term, while the company’s broader AI vision lays the groundwork for a transformative multi-year growth trajectory.

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With strong sales projections and continued innovation, Apple remains a dominant force in the tech industry and a compelling investment for long-term growth.

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