- Apple received two price target raises from CFRA and Bernstein on Friday.
- The two research firms raised their target price for Apple to $240, indicating a 14% upside potential.
- Apple's WWDC event last week showed off new AI technology that continues to impress Wall Street.
Two Wall Street research reports suggest that Apple's status as a leader in artificial intelligence could help the company's stock price rise by an additional 14%.
CFRA and Bernstein both raised their price targets on Apple to $240 per share on Friday, after the company's shares have risen 27% from a low of about $165 per share in late April.
CFRA analyst Angelo Gino, who previously had a $210 price target, said Apple is poised to turn the iPhone into the “ultimate personal assistant.”
At WWDC last week, the company unveiled a product lineup called “Apple Intelligence” that will enhance Siri into a smart digital assistant that's more conversational than the current version.
Gino said Wall Street analysts are underestimating Apple's iPhone 16 sales figures, expecting sales to increase 3% to 5%, adding that the company has the power to raise prices for the iPhone.
“We expect Apple Intelligence (AI) will support incremental consumer upgrades driven by loyal customers and an aging installed base. AI is evolutionary rather than cyclical, lending itself to multi-year growth,” Zino said.
Bernstein analyst Toni Sacconaghi also sees big upside potential for Apple shares in the future.
Sacconaghi argued that Apple's WWDC keynote has made the company a leader in AI, with its ability to bring AI to the masses through its more than 1 billion iPhone users.
“Apple can bring AI to the masses and make it more convenient for everyday use,” Sacconaghi said. “Apple has reportedly not paid ChatGPT, underscoring the power the company has.”
Apple is proposing to integrate ChatGPT into its AI products, which are scheduled to be released alongside the iPhone 16 later this year.
And Apple's huge installed base means it has a big opportunity to monetize its AI capabilities, according to the memo.
The AI features will lead to a stronger iPhone upgrade cycle, allow Apple to earn advertising revenue through AI search queries, and could also boost app store revenue as more AI-focused apps are released.
Finally, the company can use Apple Intelligence to “act as a channel middleman to third-party apps, allowing Apple to earn commerce and promotional fees,” Sacconaghi explained.
Bernstein set a $240 price target based on fiscal 2025 earnings of $8.00 a share and a record earnings multiple of 30. Sacconaghi previously had a $195 price target on Apple shares.
