JPMorgan analysts increased their price target for Apple (NASDAQ:AAPL) shares to $245 from $225, citing potential EPS growth driven by an AI-fueled iPhone upgrade cycle.
The update follows the Worldwide Developers Conference (WWDC), where Apple unveiled AI features expected to boost iPhone sales. The analysts anticipate that the iPhone 16 launch will start this upgrade cycle, peaking with the iPhone 17 launch. As a result, JPMorgan raised its iPhone volume estimates to 250 million units for 2025 and 275 million units for 2026, predicting a stronger year-over-year increase compared to the 5G cycle. This forecast is based on conservative replacement rates, a two-year ramp to peak volumes, and the backward compatibility of AI features on the iPhone 15 Pro/Pro Max. They also expect major hardware upgrades in 2026.
Additionally, the analysts have increased growth projections for Apple’s Services segment, driven by higher monetization from third-party AI applications in the coming years.
This combination of factors led JPMorgan to raise its 2025 and 2026 EPS estimates to $8.10 and $9.69, respectively, compared to consensus estimates of $7.26 and $7.64. Despite significant buy-side estimate increases post-WWDC, JPMorgan sees further upside potential for Apple stock. Currently valued at about 22 times their 2026 estimates, the analysts believe a 25 times valuation is more appropriate.
The updated model primarily considers AI-driven increases in iPhone volumes, with potential additional upsides from AI capabilities enhancing iPad and Mac devices.