JP Morgan cuts Apple price target amid questions about when AI iPhone will launch

Apple CEO Tim Cook

Investment firm JP Morgan predicts Apple will introduce artificial intelligence in 2025 iPhone 17 Pro , and Partially because of this, the company lowered its current price target to $210.

In February 2024, JP Morgan lowered its price target on Apple from $225 to $215, citing weaker iPhone demand in China. Part of the fresh drop to $210, announced in a note published by AppleInsider, is the best time to get back into Apple stock ahead of the expected AI iPhone.

The investment firm believes the addition of artificial intelligence features is reminiscent of when Apple introduced 5G for the iPhone. This has led to an increase in upgrades due to the obvious speed benefits of 5G, causing the share price to rise.

Tracking this price back to 2019, as 5G rumors grew stronger, and following its launch with the iPhone 12 line in 2020, analysts say the valuation peaked in the first half of 2021. While 5G has had more immediately obvious benefits than AI, analysts are predicting a similar cycle.

JP Morgan says hedge fund investors are particularly keen on the AI ​​upgrade, but there are doubts about when it will actually happen. While Apple has made it clear that iOS 18 will introduce AI features later in 2024, it is only a guess that the iPhone 16 Pro will have any AI-related hardware upgrades this year.

“In our view, we expect the upgrade cycle to be driven by the iPhone 17 [in 2025],” the analysts said in a note. Specifically, they expect to see increases in RAM and neural processors in September 2025, as well as “a broader understanding of potential AI use cases.”

JP Morgan says it's unlikely that Apple or smartphone rivals will introduce more than limited artificial intelligence-related hardware upgrades in 2024.

In addition to the lack of an AI-powered iPhone 16 Pro, JP Morgan predicts a decline in demand for Mac and iPad, and also questions the growth of Apple services.

Overall, the company expects the Services to be at risk due to ongoing regulatory issues such as the App Store and Apple Music. However, they believe that these problems will take some time to resolve and will “become beyond the scope of the AI ​​update problem.”

Additionally, Wedbush maintained Apple's $250 price target, in part because it expects pent-up demand for the AI-powered iPhone 16 Pro.

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