Apple's Stock Outlook: Analyst Forecasts 33% Upside Potential

Investors are showing apprehension regarding Apple's (NASDAQ: AAPL) recent downturn in iPhone sales, experiencing a 9% drop in the U.S. and double that in China. Moreover, the absence of a proprietary artificial intelligence product adds to worries, leading to a 13% decrease in share prices since the start of 2024.

Despite these challenges, Bank of America stands firm in its optimism, projecting a significant 34% rise in Apple stock value, potentially reaching $225 within a year.

The question arises: Is Apple's stock still a viable investment option? According to Bank of America, there's reason to be optimistic. A notable 10% increase in Q2 App Store sales indicates potential growth. March's statistics reveal a 13% surge globally, albeit a more modest 7% in China. This suggests that services like app sales could become a key driver of revenue growth, especially as hardware sales face saturation.

While Apple maintains its dominance in the global phone market, with 1.5 billion iPhones currently in use, further hardware growth may be limited. Conversely, the opportunity for continued expansion lies in services such as app sales, which aren't constrained by hardware limitations.

However, analysts caution that earnings growth over the next five years may only average around 10%, mirroring recent App Store growth rates. This implies that Apple may no longer be considered a high-growth stock, raising concerns about its current valuation.

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