Apple’s Share Price Jumps 3% Amid iPhone Sales Recovery

Morgan Stanley analysts believe China remains a wildcard but highlighted Apple's AI features supporting iPhone growth.

Apple’s shares surged more than 3% in premarket trading following an optimistic sales forecast, signaling a potential recovery from the dip in iPhone sales, especially as the company integrates artificial intelligence features. “With investors highly tuned into how AI spend will represent real revenue for big tech, Apple’s results have provided…reassurance,” said Susannah Streeter of Hargreaves Lansdown.

Unlike Microsoft, which invested heavily in AI, Apple has strategically integrated AI into hardware features. This approach paid off, especially after China’s DeepSeek launched free AI technology, impacting competitors and boosting Apple’s stock slightly.

Despite strong overall sales and profits, Apple saw a slight decline in iPhone revenue for the holiday quarter, missing Wall Street expectations due to a lack of AI features. Morgan Stanley analysts believe China remains a wildcard but highlighted Apple’s AI features supporting iPhone growth. “China demand could recover as AI features get launched,” said TD Cowen analysts. At least eight analysts raised their price targets on Apple, with the median target reaching $250.

In 2024, Apple’s stock increased by 30.07%, outperforming Microsoft (up 12.09%) and Meta (up 65.42%). Apple’s 12-month forward price-to-earnings ratio stands at 31.12, compared to Microsoft’s 29.2 and Meta’s 26.7.