:max_bytes(150000):strip_icc()/GettyImages-2170418002-e21de60d15cc4e7eb0e45d55cc0c2bd9.jpg "These Stock Analysts Are Bullish on Apple’s iPhone 16 Launch—Here’s Why")
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Key Takeaways
- Analysts are largely bullish on Apple’s potential to benefit from an AI-fueled upgrade cycle after the iPhone 16 designed for AI was unveiled Monday.
- However, some analysts warned a slow rollout of new AI features could hold back sales in the near term.
- Health features of the new smartwatch and AirPods like sleep apnea detection and hearing aid could also drive more users to Apple’s ecosystem, Bank of America analysts said.
- iPhone 16 pre-order data this Friday and early sales following the Sept. 20 release could offer more insights into consumer appetite for the new products.
Analysts are largely bullish Apple (AAPL) could see an AI-fueled upgrade cycle after the tech giant revealed the AI-charged iPhone 16 on Monday, though some warned a slow rollout of new AI features could hold back sales in the near term.
Most Apple analysts tracked by Visible Alpha hold a “buy” or equivalent rating for the stock after Apple unveiled its latest iPhone with AI-powered capabilities, along with new versions of its smartwatch and AirPods.
Expecting an AI-Driven Upgrade Cycle
A number of analysts including those from JPMorgan, Jefferies, and Wedbush said Monday and Tuesday that they anticipate an AI-driven upgrade cycle following Monday’s launch event. However, the lack of a “specific timeline” for the rollout of many AI features leaves some uncertainty around Apple’s AI plans, JPMorgan analysts said, which could delay sales.
Jefferies analysts said the vague timeline for AI feature releases could turn the coming upgrade cycle into a multi-year cycle that includes releases of the iPhone 17 and beyond once more useful features are broadly available, rather than massive upgrades to the iPhone 16.
JPMorgan and Morgan Stanley analysts also said other improvements important to consumers like camera and battery life could drive upgrades, along with “attractive” trade-in offers from Apple and cellular carriers.
Several analysts said their focus has now shifted to pre-order data this Friday and early sales data following the Sept. 20 launch to provide insight into how consumers view the new phones.
Health-Focused Upgrades to Watch, AirPods Could Expand Market
Bank of America analysts added that health features of the new smartwatch and AirPods could broaden markets for the products, “driving more users” to Apple’s ecosystem. The Apple Watch Series 10 and AirPods Pro 2 both have features pending Food and Drug Administration (FDA) approval, with the watch offering a new sleep apnea detection program and the AirPods able to function as a hearing aid.
Given the connection Apple looks to foster between its products, Needham analysts said sales of the wearable products driven by the health updates could help boost future sales of iPhones once more definitive AI capabilities are added.
Apple shares were little changed at $220.49 in intraday trading Tuesday, and have gained over 14% since the start of the year.