Apple stock continues to hit new record highs, extending this year’s impressive rebound. Evercore ISI sees the momentum continuing for some time, and it’s about more than just iPhone sales. Analyst Amit Daryanani raised his price target for Apple to $365 from $330 on Thursday, implying roughly 22% upside from today.
Angela Palumbo for Barron’s:
Daryanani’s increased bullishness on Apple stock is based on confidence that the company can grow earnings and free cash flow at a steady pace, he wrote in a research note. Even if iPhone sales moderate, he says customers will likely prioritize purchasing higher-end, more expensive iPhone models. This could include the highly anticipated foldable iPhone.
The analyst is also confident that Apple will continue to grow its services segment, which includes the App Store and other subscription services and is the company’s highest margin piece of the business. That, along with selling higher-priced iPhones, could help Apple’s overall margins as memory cost headwinds remain, he said.
“We now expect AAPL to preview the strategy at WWDC and release a more personalized Siri with iOS 27 in the fall,” alongside the September iPhone event, Daryanani wrote.
MacDailyNews Take: It’s certainly about more than just the iPhone with Apple’s Services revenue reaching a record $30.976 billion in fiscal Q2 2026 (ended March 28, 2026), up 16% year-over-year.
This high-margin segment delivered a gross margin of 76.7%, far exceeding the company’s overall gross margin of 49.3%.
For perspective, that single-quarter Services figure nearly matches Starbucks’ full fiscal 2025 revenue of $37.2 billion and PayPal’s full-year 2025 revenue of $33.2 billion, while representing a substantial portion of companies like Uber ($52 billion full-year 2025) or Netflix ($45.2 billion full-year 2025) — highlighting the tremendous scale and profitability of Apple’s recurring Services business.
Please help support MacDailyNews — and enjoy subscriber-only articles, comments, chat, and more — by subscribing to our Substack: macdailynews.substack.com. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
