According to CNBC, Bank of America analyst Wamsi Mohan has reiterated his buy rating on Apple and raised his price target from $270 to $320 per share, representing a 19% upside potential. Mohan’s updated outlook comes ahead of Apple’s fiscal fourth-quarter earnings report on Thursday, where he expects strength in iPhone 17 Pro and Pro Max sales and anticipates the company will guide for high single-digit revenue growth. The analyst believes Apple is positioned for sustained long-term growth despite its massive size, citing its brand strength, ecosystem advantages, and emerging leadership in artificial intelligence. Mohan specifically highlighted AI’s potential to enhance new product categories like augmented eyewear and smart home devices while potentially disrupting traditional revenue streams like search.
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The Edge Computing Advantage
What makes Bank of America’s AI thesis particularly compelling is Apple’s unique position in edge computing. Unlike cloud-based AI models that require constant internet connectivity, Apple’s ecosystem of devices—from iPhones to AirPods to future wearables—creates an ideal platform for on-device AI processing. This approach offers significant advantages in privacy, latency, and reliability that cloud-first competitors can’t easily replicate. As AI becomes more integrated into daily life, the ability to process sensitive data locally rather than sending it to remote servers could become Apple’s killer feature, especially in markets with privacy-conscious consumers.
Beyond Hardware: The Services Transformation
While the report focuses on new hardware categories, the bigger story may be how AI transforms Apple’s services revenue. Currently representing over 25% of total revenue, Apple’s services business could see dramatic expansion through AI-powered features. Imagine Siri evolving from a simple voice assistant to a true AI companion that manages your schedule, anticipates your needs, and integrates seamlessly across all Apple devices. This could create new subscription revenue streams beyond Apple’s current offerings and strengthen the ecosystem lock-in that has been so profitable for the company. The transition from hardware company to services-plus-AI platform represents Apple’s next major evolution.
Navigating the AI Arms Race
Apple faces significant challenges in the intensifying AI competition. While companies like Google, Microsoft, and Amazon have been aggressively acquiring AI startups and launching cloud-based AI services, Apple has taken a more measured approach focused on integration rather than acquisition. This strategy has risks—Apple could fall behind in core AI capabilities while competitors race ahead. However, Apple’s control over both hardware and software gives it integration advantages that pure software companies lack. The real test will be whether Apple can develop AI that feels genuinely revolutionary rather than playing catch-up to features already available on competing platforms.
The Analyst Consensus Question
With 33 of 51 analysts maintaining buy ratings according to the report, the broader market sentiment appears strongly positive. However, this consensus itself creates risk—if Apple delivers anything less than stellar results or guidance, the stock could face significant downward pressure. The high expectations are particularly challenging given Apple’s massive $2.8 trillion market capitalization, where maintaining growth becomes increasingly difficult. Investors should watch for whether Apple can demonstrate meaningful AI differentiation beyond the current iPhone upgrade cycle, as that will determine whether the stock can sustain momentum beyond the near-term enthusiasm.
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The Regulatory Wild Card
One factor notably absent from the analysis is the growing regulatory scrutiny facing major tech companies. As Bank of America and other institutions raise targets, they’re not fully accounting for potential regulatory headwinds that could limit Apple’s AI ambitions. Recent antitrust investigations in both the US and EU could restrict how Apple integrates AI across its ecosystem or force changes to its App Store policies that currently generate substantial services revenue. Additionally, AI-specific regulations around data privacy and algorithmic transparency could impact Apple’s development timeline for new AI-powered products and services.
