Wedbush: Apple's Q4 performance is expected to be "impressive," with the outlook for iPhone 17 and AI layout becoming the focus of attention

According to the Zhitong Finance APP, Wedbush released a research report, maintaining its "outperform" rating and a target price of $270 for Apple (AAPL.US) ahead of the company's fourth-quarter earnings report. Analysts led by Daniel Ives stated that the market will focus on whether Apple can deliver impressive financial results, with a slight recovery in iPhone sales in China being particularly crucial.

The analysts noted that supply chain data from Asia this quarter indicates stable global iPhone demand, with signs of improvement in the Chinese market. This core market has faced growth pressures over the past year, with increasingly fierce competition from local smartphone manufacturers, making its recovery vital for Apple. Additionally, analysts expect the services business to continue its strong growth momentum, becoming a highlight of this quarter's performance.

The analysts stated, "This earnings report is just an appetizer before the September iPhone 17 launch, and Cook's comments during the conference call regarding product prospects and demand expectations will be the focus of the market."

Ives and his team predict that as the demand for device upgrades from the global installed user base is released, the iPhone 17 will drive accelerated sales growth. Analysts estimate that approximately 20% of the 1.5 billion iPhones globally have not been upgraded for over four years.

Ives' team stated, "However, the biggest mystery remains Apple's artificial intelligence (AI) strategic layout. While the entire tech industry is focused on the biggest technological revolution in 40 years—the wave of AI commercialization—Apple has yet to take substantial action." The analysts clearly stated that Apple's innovation in the AI field cannot rely solely on internal development. It is estimated that a successful AI commercialization strategy could bring a valuation increase of $75 per share for Apple, "time is running out for Cook to break the deadlock."

"Based on years of tracking research, we know that Apple has always favored independent research and development over acquisitions. But times have changed—Apple urgently needs to quickly build an AI ecosystem through acquisitions of quality targets like Perplexity," the analysts bluntly stated, "This 'self-evident' deal will completely activate Apple's AI strategy."

The analysts warned that the patience of investors and developers is wearing thin, and Apple must achieve substantial breakthroughs in its AI strategy. Although it is expected that Cook will continue to lead Apple for at least five more years, he currently faces three major challenges: the pricing dilemma of iPhones due to tariffs, geopolitical risks in the Indian supply chain, and the lack of a foundational AI strategy—"This chapter will determine Cook's legacy."

Ives' team concluded by emphasizing, "Cook and Apple's management must confront the new era of AI-driven technological revolution. If they continue to remain stagnant, it may leave a significant strategic blunder in the history of technology."