Key Takeaways
- Citi Research upgraded Apple’s price target to $365 from $315 while maintaining its Buy recommendation
- The iPhone 18 September release is viewed as a significant driver for positive market sentiment
- Apple is projected to expand its presence in both smartphone and PC markets amid intensifying competition
- Strategic price increases are anticipated to counter margin challenges, with foldable devices expected later this year
- The company faces ongoing litigation with OpenAI regarding trade secret misappropriation
Shares of Apple (AAPL) received a confidence boost on Monday when Citi Research’s Asiya Merchant elevated her price objective to $365 from the previous $315 mark, maintaining her Buy recommendation. Trading at $316.06 during premarket sessions, the revised target suggests potential gains of approximately 16%.
This adjustment arrives just before Apple’s quarterly financial disclosure slated for July 30.
Merchant indicated that Apple remains “well-positioned” to capture additional market share across smartphones and personal computers, despite mounting competitive pressure and moderating device market growth.
Her optimistic outlook centers heavily on the forthcoming iPhone 18. According to her analysis, the September unveiling “represents an important catalyst that could further strengthen investor sentiment.”
Apple has previously implemented selective price adjustments across its product lineup. Merchant anticipates this approach will extend to the iPhone 18 generation, with increases concentrated on premium-tier models where she believes consumer demand remains most resilient.
“While iPhone prices remain unchanged for now, we expect price increases in the upcoming September iPhone launch cycle,” Merchant stated.
She emphasized that the company’s dedicated customer base should help cushion any demand weakness resulting from elevated pricing.
What Role Will Apple Intelligence Play?
Merchant doesn’t anticipate Apple Intelligence triggering an immediate major replacement cycle. However, she projects that improved Siri functionality will gradually boost user interaction and strengthen Apple’s lucrative Services segment revenue.
She also noted the potential for tiered subscription models tied to the upgraded Siri AI features, which could provide additional momentum to the Services business.
Regarding hardware innovation, Merchant forecasts Apple will introduce foldable product offerings during the fourth quarter of this calendar year.
The Legal Dispute With OpenAI
Citi’s analysis didn’t address Apple’s current legal confrontation with OpenAI. Recently, Apple initiated legal proceedings against its one-time AI collaborator, alleging trade secret theft and claiming OpenAI appropriated proprietary information “at every level” for its hardware development initiatives.
Apple’s legal team described the action as “a necessary step to expose and begin to remedy the pervasive theft of Apple’s trade secrets.”
OpenAI countered these allegations, with a representative stating the organization has “no interest in other companies’ trade secrets.”
This legal conflict represents a dramatic shift from what was previously a collaborative relationship between the technology giants.
Apple’s upcoming quarterly earnings announcement is scheduled for July 30.
