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Next two quarters may be tough, but iPhone 16 & AI will return Apple to growth

Tim Cook at a game tournament in Apple Taikoo Li, Chengdu

Investment firm Wedbush says it is sticking to its $250 Apple price target and that issues such as declining sales in China will be short term because of pent-up demand for the iPhone 16 range.

Wedbush first raised its Apple price target to $250 in December 2023, just ahead of the peak holiday season. The company described Apple then as resilient, and in March 2024 said it was keeping its price target despite recognizing that there were concerns over iPhone demand in China.

Now in a note to investors seen by AppleInsider, Wedbush has outlined further details of the decline, and also commented on Apple's changing relationship with China. However, it remains bullish and says that this is because it believes that:

  • iPhone sales estimates for 2024 remain achievable
  • Predictions of 2025 iPhone sales are conservative
  • There is significant pent-up demand for the iPhone 16 range
  • Apple Services are "rock solid with double-digit growth"
  • Apple will announce AI features for the iPhone in June
  • Apple has the largest installed userbase of any company

Wedbush says that investors are braced for a "brutal March quarter" and that the June will be what it describes as soft. Yet its analysts also believe that these are the last two quarters before Apple will resume growing.

That will require Apple addressing the declining sales in China, and Wedbush says that Tim Cook's recent visit to the country is significant. It reaffirmed Apple's relationship with China, and Wedbush believes that despite moves away from the country, the majority of Apple's suppliers will remain there.

Regardless, there's not that long to wait to find out how the quarter went. Apple will announce its March quarter earnings on May 2, 2024.