Apple Analyst Predicts 25% One-Year Return, Thanks To 'Golden Era' of AI-Driven Growth: Retail Sentiment Lags

Apple Inc. ($AAPL) has consistently proven to be a resilient investment for shareholders. Despite the subdued response to this year's artificial intelligence (AI)-enabled iPhones, the stock is poised to close the year as a market outperformer.

A bullish analyst is confident the stock will continue to head higher in 2025 as the company rolls out new AI features in the U.S. and prepares to launch them elsewhere in the first half of next year. 

In a note released on Thursday, Wedbush analyst Daniel Ives maintained an ‘Outperform’ rating and upped the price target from $300 to $325, suggesting scope for over 25% upside potential.

Apple stock has gained over 35% this year, outperforming the SPDR S&P 500 ETF Trust ($SPY), an exchange-traded fund that tracks the broader S&P 500 Index. The SPY has clocked a gain of 28% during the same period. 

Ives’ bullishness stems from his view that “a golden era of growth for Cupertino is now on the horizon into 2025.

“We believe Apple is heading into a multi-year AI-driven iPhone upgrade cycle that is still being underestimated by the Street,” the analyst said.

According to Ives, the launch of Apple Intelligence has sown the seeds of Apple’s AI strategy, and the tech will transform Apple’s consumer growth narrative over the coming years.

He also highlighted another ancillary benefit. As developers scramble to create hundreds of apps around Apple Intelligence, these apps will likely make a new multi-billion dollar annual Services revenue stream. As a result, the analyst sees massive iPhone upgrades across the board over the next 12 to 18 months.

Ives reiterated that Apple will be the first corporation to enter the $4 trillion market cap club.

A singularity of Stocktwits users (38%) picked ''AI-driven innovation' as an important factor that will drive Apple’s 2024 stock performance, according to a poll.

AAPL sentiment and message volume December 26, 2024, premarket as of 10:17 pm ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Apple stayed bearish (40/100), with message volume improving to ‘high’ levels.

A user said Apple might struggle during anticipated market volatility in January 

Another, though expecting the stock to hit $265 by next Friday (Jan. 3), expects it to trade flat this Friday.

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