Apple's Stock is Soaring to Record Highs. Here's Where JPMorgan Thinks It Will Be in 2025

Apple has had a stellar year in 2024, and its stock appears well-positioned for further growth in 2025, according to an analysis by JPMorgan. The tech giant's performance has outpaced the S&P 500, climbing nearly 35% compared to the broader index's approximately 27% gain. Apple recently reached a new high and is poised to close December with a strong record, having only finished lower on three trading days this month.

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This impressive run aligns with a broader rally in technology stocks, which supported the market earlier in the week. Major indices posted consecutive gains on Monday and Tuesday, with shares of other megacap tech players like Nvidia and Meta Platforms also inching higher. Amid this positive momentum, JPMorgan analyst Samik Chatterjee has adopted an optimistic outlook on Apple.

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Chatterjee emphasizes that multiple aspects of Apple’s business and financial prospects remain undervalued by the market. These include the company’s pivot to a services-driven model, the growth of its installed user base, advancements in technology, and strategic capital allocation.

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“We see upside in several aspects of the business,” Chatterjee wrote in a recent client note, highlighting these factors as underappreciated drivers of future growth.

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A significant driver of Apple’s projected growth in 2025 is the expected launch of the iPhone 17, which Chatterjee anticipates will initiate a surge in iPhone sales volumes. He attributes this growth to the integration of Apple’s artificial intelligence platform, Apple Intelligence, which will enhance the user experience with innovative features.

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Chatterjee predicts that iPhone sales will rise from 230 million units in fiscal 2024 and 2025 to 251 million in fiscal 2026, eventually reaching 263 million in fiscal 2027. Over this period, Apple’s revenue is expected to grow at a compound annual rate of 9%, with earnings growth projected at a more robust 16%.

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Even without the transformative impact of AI, Apple is likely to maintain solid growth, Chatterjee asserts. He believes stabilizing consumer spending will help sustain iPhone sales volumes, limiting potential downside risks.

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Without contributions from AI, revenue is expected to grow at a mid-single-digit pace, supported by margin expansion and ongoing share buybacks. Earnings in this scenario could still rise between 8% and 10%, underscoring Apple’s resilience.

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Chatterjee explains that while AI-driven growth is key to the bullish case, Apple’s services revenue and margin expansion provide a strong foundation for earnings growth even in the absence of significant AI traction. This ensures the company retains its premium valuation as investors await further evidence of consumer adoption of AI features.

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One potential headwind for Apple involves the tariff plans proposed by President-elect Donald Trump, which include steep duties on goods manufactured in China and Mexico. Chatterjee, however, believes Apple can navigate this challenge effectively by implementing modest price adjustments and expanding its manufacturing operations outside China.

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“If tariffs specifically targeting manufacturing in China are imposed, we anticipate that Apple will leverage its expanding assembly footprint in India to address U.S. consumer iPhone demand, thereby mitigating volume-related headwinds from the tariffs,” he noted.

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Chatterjee’s confidence in Apple’s ability to manage such risks aligns with broader sentiment on Wall Street. Analysts widely believe that the company’s diversified manufacturing strategy and strong brand loyalty position it to withstand geopolitical pressures.

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Apple’s strong performance has garnered bullish sentiment from most analysts. Of the 49 analysts covering the stock, 35 have a strong buy or buy rating, while 12 hold a neutral stance, according to data from LSEG.

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During Thursday’s trading session, Apple shares rose 0.3%, contributing to a month-to-date gain of over 9%. Chatterjee, who holds an overweight rating on the stock, has set a price target of $265, reflecting more than 2% upside from Tuesday’s close.

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Looking ahead, Apple’s trajectory remains promising. The anticipated iPhone upcycle, coupled with steady growth in its services segment and continued technological leadership, positions the company for sustained success. Apple’s ability to innovate, expand its user base, and manage external challenges ensures it remains a dominant force in the tech sector.

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While AI advancements present significant upside potential, Apple’s diversified growth strategy offers resilience against market uncertainties. For investors, the company represents a compelling opportunity to capitalize on both near-term momentum and long-term innovation. With a strong finish to 2024, Apple appears poised to continue its upward trajectory into 2025 and beyond.

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