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Apple’s stock price could make healthy gains for foreseeable future

MacDailyNews

Feb 4

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Apple could be at the beginning of a nice growth curve for the next three years, Harsh Chauhan writes for The Motley Fool, and that could lead to healthy gains for its stock price.

Harsh Chauhan for The Motley Fool:
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The company will continue to roll out Apple Intelligence features throughout the year in different languages. What’s more, Apple is reportedly planning to make Siri more conversational with the help of large language models (LLMs). The good part for investors is that the rollout of AI features is having a positive impact on Apple’s sales. Responding to an analyst’s query on the latest earnings conference call, CEO Tim Cook remarked: “We did see that the markets where we had rolled out Apple Intelligence that the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available.”
Wedbush Securities analyst Dan Ives is forecasting a multiyear iPhone upgrade cycle thanks to AI. He estimates that there are around 300 million iPhones in use that are more than four years old. Their users will have a reason to upgrade once Apple Intelligence is available in their region, or the company makes more enticing features available for its new models.
The guidance is better than expectations, suggesting that the company could be on its way to reporting stronger growth this year as its AI rollout gains momentum. Additionally, investors shouldn’t forget that Apple is among the leading vendors in the smartphone and personal computer (PC) markets, both of which are expected to get a nice lift from generative AI.
If Apple’s earnings indeed hit $9.17 per share in fiscal 2027 and it trades at 33.5 times earnings at that time, in line with the current ratio for the Nasdaq-100 (using that tech-heavy index as a proxy for tech stocks), its stock price would be $307 — a jump of 30% from current levels.

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MacDailyNews Take: As we wrote last September:

This will be a slow burn – a stronger-than-usual multi-year upgrade cycle – as Apple Intelligence features get written, tested, and delivered to customers over a period of many months, into next year certainly, and, with new, as-yet-unannounced features, beyond.

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