Evercore Sees Overstated Bearish Concerns For Apple

Evercore ISI analysts reaffirmed their Outperform rating on Apple (NASDAQ:AAPL) with a $250 price target, expressing optimism amid recently bearish market sentiment. With buyside expectations currently below consensus estimates, the analysts believe Apple is positioned to meet current targets, likely pushing the stock higher.

Concerns have centered around Apple’s standing in the Chinese smartphone market, but the analysts see this as overblown. They pointed to demand growth in emerging markets and a robust U.S. upgrade cycle, partly driven by AI advancements. Although Huawei remains a competitor in China, its supply chain issues limit its ability to challenge Apple's higher-end models. Additionally, anticipated government stimulus in China could boost smartphone demand industry-wide.

The analysts highlighted the positive impact of a staggered AI rollout, which they expect will extend the iPhone’s upgrade cycle, attracting new users as features are released in various regions. They are also bullish on Wearables and Services, particularly as new products like the Watch Ultra, AirPods 4, and USB-C AirPods Max hit the market, likely driving wearables growth in the December quarter. While gross margins could benefit from a favorable iPhone mix, lower Services revenue may offset some of the gains. Overall, the analysts expect Apple to exceed low market expectations for the September quarter and deliver a strong December quarter outlook.