Apple stock could potentially see a rerating when the company releases its rumored AI-enabled iPhone in the fall, according to a Wall Street analyst. Despite some near-term challenges in the company’s fundamentals, as stated by JPMorgan analyst Samik Chatterjee in a note to clients, investors are beginning to show interest in Apple stock. The recent decline in Apple shares has made the valuation more attractive in anticipation of a significant upgrade cycle for the iPhone, Chatterjee noted.
The upcoming iPhone 16, expected this fall, is likely to feature AI capabilities to appeal to consumers. Although Apple stock has declined around 13% year-to-date due to weakened hardware demand and slower services growth, Chatterjee still maintains an overweight rating on the stock while lowering his price target to 210 from 215.
Despite the challenges faced by Apple, the stock rose 0.5% in premarket trading to 168.68. Chatterjee anticipates a potential rerating of Apple stock prior to the launch of the AI iPhone. He believes that the major upgrade cycle for iPhones will occur with the iPhone 17 series in late 2025, when on-device AI technology will have expanded use cases.
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