Apple (AAPL) Stock: Why Evercore Still Sees 18% Upside Potential

TLDR:

Table of Contents

Donald Trump owns over $500,000 in Apple stock (approximately 2,355 shares)
Evercore ISI maintains an Outperform rating on Apple with a $250 price target
Apple stock has fallen about 15% year-to-date in 2025
The company faces risks to its Services revenue from regulatory issues and potential changes to Google search payments
Apple recently announced new accessibility features and is working on AI-based battery management

President Donald Trump has invested over $500,000 in Apple stock, representing a tiny fraction of his estimated $5 billion net worth. According to recent reports, Trump owns around 2,355 shares based on Apple’s May 16 closing price of $211.26.

This investment comes as Apple faces several challenges. The stock has declined about 15% so far in 2025 and sits more than 18% below its December 2024 record high of $260.10.

Despite these struggles, Evercore ISI recently reaffirmed its positive outlook on Apple. The firm maintained an Outperform rating with a $250 price target on Monday.

Evercore’s analyst emphasized the importance of Apple’s Services business to the company’s valuation and growth. This segment has been central to Apple’s recent multiple rerating.

Apple currently boasts a market capitalization of $3.16 trillion and generated $138.9 billion in EBITDA over the last twelve months. The company reported total revenue of $400.4 billion with a gross profit margin of 46.6%.

Key Risks to Services Revenue

The analysis identified two main risks to Apple’s Services revenue: regulatory issues affecting the App Store and potential changes to the default search engine payment from Google.

The App Store represents 2% of Apple’s revenue and 6% of its earnings per share (EPS). Meanwhile, the Google payment accounts for 6% of revenue and 16% of EPS.

A bear case scenario suggests Apple could face a 20% hit to EPS if it loses both its U.S. Google payment and App Store revenue. This could potentially drive the stock price down to $144.

The bull case assumes Apple successfully appeals the Epic case and avoids any impact on the App Store. It also assumes the Department of Justice doesn’t interfere with the Google payment.

Apple faces additional headwinds from potential tariffs on China. The company has relied heavily on Chinese factories to produce iPhones, though a recent trade agreement has eased fears of a full-blown trade war.

President Trump has expressed disapproval of Apple’s production shift to India following a conversation with CEO Tim Cook.

President Trump telling Apple CEO Tim Cook to move iPhone production back home instead of to India.
Trade, tariffs, and iPhones: we take a closer look at what’s happening in trade in and out of the tech field between the Trump administration and India. pic.twitter.com/ccZerolHxl
— NTD Features (@NTDFeatures) May 16, 2025

Future Growth Potential

Looking ahead, a strong iPhone cycle with increased average selling prices could boost fiscal year 2026 earnings to $9 per share. This scenario could value the stock at $300, matching the current analyst high target.

Apple’s current diluted EPS stands at $6.40, with analyst consensus forecasting $7.22 for FY2025.

The company continues to focus on technological advancements. Apple recently announced new accessibility features, including Accessibility Nutrition Labels on the App Store and a Magnifier app for Mac.

Apple is also reportedly developing an AI-based battery management mode for its upcoming iOS 19. This feature aims to improve iPhone battery life by analyzing user behavior to optimize energy usage.

In a separate development, Apple has blocked access to the popular video game “Fortnite” on iPhones globally, affecting users in both the United States and European Union.

KeyBanc Capital Markets has maintained a Sector Weight rating on Apple stock. The firm cited concerns over high growth expectations, stagnant upgrade rates, and increased competition in China.

The analyst at Evercore noted negative sentiment among investors toward Apple. They suggested that favorable outcomes in court cases or tariff issues could provide a boost to the stock.

Apple stock closed at $211.26 on Friday, May 16.

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