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1 Wall Street Analyst Says Apple Could Hit $230. Is It a Buy?

Share prices of Apple (AAPL 0.55%) got a nice boost recently, jumping after the company unveiled Apple Intelligence, directly tapping into the outsized enthusiasm for all things artificial intelligence (AI) related. Apple Intelligence includes a suite of generative AI tools such as content and image generation, in addition to an improved Siri assistant.

The move is Apple’s attempt to reassert its leadership in consumer tech. It should help Apple convince consumers to upgrade their smartphones at a time when the company has been struggling with a lengthening upgrade cycle. The price boost after the news was announced suggests investors are happy with the announcement.

One Wall Street analyst is also jumping on the bandwagon.

Bank of America says Apple is a buy

Apple Intelligence won’t be its own revenue segment in Apple’s financials, but it’s expected to be a significant incentive for some segments investors focus on. For instance, it’s likely to spark more iPhone upgrades and encourage developers to build generative AI apps on iOS that should boost service segment revenue.

Bank of America analyst Wamsi Mohan reiterated a buy rating on the tech leader with a price target of $230, implying an 8% upside over the next year from where the stock traded at Wednesday’s close. Mohan argued that consensus estimates for iPhone sales are too low at 241 million and 238 million for the calendar years 2025 and 2026, respectively, and said the launch of Apple Intelligence would help drive a stronger upgrade cycle.

Is Apple stock a buy?

The stock had been a laggard in the AI race, but the Apple Intelligence launch is a reminder of how powerful its installed base of more than 2 billion devices is. Its ecosystem creates a lock-in effect and makes it easy to sell new products or use them to make its devices more attractive.

While the stock is expensive, Apple still looks like a good bet to gain over the long term, especially if Apple Intelligence can give a boost to the upgrade cycle.

This post appeared first on fool.com

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