Wedbush Securities raised its price target on Apple Inc. (NASDAQ:AAPL) to $400, arguing the company is on the verge of a major new growth cycle driven by artificial intelligence that the market has yet to price in.
"We believe over the next few years Apple will be able to monetize the AI Services and storage features translating into what could be an additional $15 billion of annual services revenue," Wedbush analyst Dan Ives said in a note published Thursday. The firm maintained its 'outperform' rating on the stock.
The new $400 target, a jump from $350, represented a 39% upside from Apple’s share price of $287.44 at the time of the note. Ives sees the company’s Worldwide Developers Conference (WWDC) in June as the starting gun for its AI push, where new chief executive Kevan Ternus is expected to detail the strategy. Central to the thesis is the upcoming iOS 27, which is anticipated to allow users to select from various AI models, including Google’s Gemini and offerings from OpenAI and Anthropic.
This strategy positions Apple not as a developer of a single proprietary model, but as the key distribution platform for consumer AI. Wedbush believes this could add between $75 and $100 of value per share, underpinning the new price target. The potential AI revenue would be a significant, high-margin addition to Apple's existing services business, which generated over $100 billion in fiscal 2025.
WWDC and China Catalysts
The upcoming WWDC is the primary catalyst for this re-rating, where Apple is expected to finally showcase its generative AI capabilities. Ives believes the integration of AI into the iOS ecosystem will be a pivotal moment, turning the company into the "consumer hub of AI technology."
Further, the firm highlighted Apple's partnership with Alibaba in China as a key component for expanding its AI footprint in the massive Chinese market. Despite regulatory scrutiny, this collaboration is seen as crucial for Apple to monetize its large and growing installed base in the region.
The upgrade suggests the market may be underestimating the financial impact of Apple's AI strategy. The upcoming WWDC in June will be a critical test of this thesis, as investors look for concrete details on how Apple plans to turn its vast user base into a new stream of high-margin AI services revenue.
This article is for informational purposes only and does not constitute investment advice.
