Key Highlights
- Citi analyst Asiya Merchant lifted Apple’s price target to $365 from $315 while reaffirming a Buy recommendation
- The upcoming iPhone 18 September debut is viewed as a major catalyst for positive market sentiment
- Apple projected to expand its footprint in both smartphone and PC markets amid intensifying rivalry
- Strategic pricing adjustments anticipated to counter margin challenges, with foldable products expected by Q4
- Company faces ongoing litigation with OpenAI concerning alleged misappropriation of proprietary information
Shares of Apple (AAPL) received a significant vote of confidence on Monday after Citi Research’s Asiya Merchant elevated her price objective to $365 from the previous $315 mark, while maintaining her Buy recommendation. With shares hovering around $316.06 during premarket trading, the updated target suggests potential gains of approximately 16%.
This bullish revision arrives just days before Apple’s quarterly earnings disclosure on July 30.
According to Merchant’s analysis, Apple remains “well-positioned” to capture additional market share across both smartphone and personal computer segments, despite mounting competitive pressures and a decelerating device market.
Central to her optimistic outlook is the forthcoming iPhone 18. The anticipated September unveiling, she noted, “represents an important catalyst that could further strengthen investor sentiment.”
Apple has already implemented pricing adjustments across select product lines. Merchant anticipates this approach will extend into the iPhone 18 generation, with increases concentrated primarily on premium-tier models where she believes consumer demand remains resilient.
“While iPhone prices remain unchanged for now, we expect price increases in the upcoming September iPhone launch cycle,” Merchant stated.
She further highlighted the company’s devoted customer ecosystem as a protective factor against potential demand weakness resulting from elevated pricing.
Apple Intelligence: A Long-Term Play
Merchant isn’t banking on Apple Intelligence to trigger an immediate mass upgrade wave. However, she believes improved Siri functionality will gradually boost user interaction and support expansion in Apple’s lucrative Services segment.
She also suggested the possibility of introducing subscription-based pricing tiers for the enhanced Siri AI features, which could provide an additional revenue stream for the Services business.
Regarding hardware innovation, Merchant anticipates Apple will introduce foldable products during the fourth quarter of the current calendar year.
Legal Conflict With OpenAI
Notably absent from Citi’s research note was any mention of Apple’s escalating legal confrontation with OpenAI. The tech giant recently filed suit against its former artificial intelligence collaborator, accusing OpenAI of systematic trade secret misappropriation, asserting the company unlawfully obtained intellectual property “at every level” to advance its own hardware ambitions.
Apple’s legal team characterized the action as “a necessary step to expose and begin to remedy the pervasive theft of Apple’s trade secrets.”
OpenAI rejected the allegations, with a company representative stating they have “no interest in other companies’ trade secrets.”
This contentious lawsuit represents a dramatic deterioration of what was previously a collaborative relationship between the two technology firms.
Apple’s upcoming quarterly financial results are scheduled for release on July 30.
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