Apple Inc. (AAPL) stock reached its first record closing high of the year on Monday, igniting market enthusiasm as Wall Street exclaimed that the long-awaited iPhone replacement wave has finally arrived. On that day, Apple’s stock price rose 3.94% to close at $262.24, successfully surpassing the previous high set last December. Looking back at its performance this year, Apple was once a focal stock lagging behind in the S&P 500, with a cumulative decline of up to 31% by the low point in April. However, powered by a strong rebound of over 50% since then, this tech giant finally turned its year-to-date gain positive in late September, returning to an upward trajectory.
The core driver behind this stock strength comes from strong signals of better-than-expected demand for Apple’s latest iPhone series. Analysis data from Counterpoint Research last weekend showed that sales of the iPhone 17 series in the US and Chinese markets in the first 10 days of availability were 14% higher than those of the previous iPhone 16 series. This positive performance significantly boosted investor confidence in the start of a robust replacement cycle. In a report upgrading the stock rating from “Hold” to “Buy,” Loop Capital analyst Ananda Baruah explicitly stated: “We are currently at the starting point of Apple’s long-awaited replacement cycle.” He believes this trend stems both from accumulated user replacement demand and the consumption momentum spurred by the new design cycle. Based on this, he raised Apple’s target stock price to $315, which stands as the highest among current Wall Street institutions, suggesting approximately 20% potential upside.
Previously, the market had high hopes for the upgrade effect brought by the iPhone 16 launch, but its heavily promoted AI features failed to materialize as expected, leading to disappointment. Now, besides Loop Capital, more institutions are shifting to a positive stance. Evercore ISI included Apple in its “Tactical Outperform” list, citing iPhone demand data that “suggests this replacement cycle could exceed normal levels.”
However, amidst the widespread optimism, it’s necessary to calmly assess potential risks. Not all institutions believe the initial popularity of the iPhone 17 series is sufficient to support Apple’s current valuation level. Currently, Apple’s forward P/E ratio exceeds 32 times, significantly higher than its 10-year average of around 22 times. Simultaneously, its stock trades at a premium relative to the Nasdaq 100 index and is the most highly valued company among the “Magnificent Seven,” except for Tesla (TSLA). Furthermore, Apple’s “popularity” among Wall Street analysts is not particularly prominent compared to its peers. Data shows that even after including Loop Capital’s upgrade, the percentage of analysts rating Apple a “Buy” remains below 60%, ranking above only Tesla within the “Magnificent Seven.” Jefferson Edison Lee, one of only four analysts currently giving Apple a “Sell” equivalent rating, warned last weekend that “the sales momentum of the iPhone 17 series is continuously slowing down,” and pointed out that market expectations for the rumored “foldable iPhone” might be too high, expressing concern that its high price could potentially erode sales of existing premium models.
