- Apple's iPhone 16 launch will drive the company to a $4 trillion valuation by 2025, Wedbush said.
- Wedbush analyst Dan Ives raised Apple's price target to $300, citing the iPhone 16's AI features.
- Pent-up demand and unchanged prices are set to fuel iPhone 16 sales, especially in China, Ives said.
Apple's upcoming launch of the iPhone 16 will help catapult the company to a $4 trillion valuation in 2025, according to Wedbush Securities.
Wedbush analyst Dan Ives bumped the firm's Apple price target to $300 from $285, representing potential upside of 38% from current levels.
Ives said the iPhone 16 will be Apple's "most successful iPhone unit launch in its history" thanks to its AI-focused features, dubbed Apple Intelligence.
"We believe the careful rollout of Apple Intelligence features over the next 6-9 months is the right strategy to catalyze a major upgrade opportunity within Apple's installed base," Ives said.
The Wall Street analyst expects iPhone sales growth to be in the high-single-digits over the next 12 to 18 months, in what will ultimately become a replacement "super cycle."
"We are continuing to see further indications across the Asia supply chain that this iPhone upgrade cycle could be a historical one setting the stage for a supercycle as currently we estimate roughly 300 million iPhones globally have not upgraded in over 4 years," Ives explained.
That pent-up demand among iPhone users who need a new phone will ultimately help fuel iPhone 16 unit sales of 240 million in 2025, he predicted.
Ives was also encouraged by Apple's decision to leave iPhone prices unchanged for its new 16 and 16 Pro models, which was "a smart strategic move to not miss out on any upgrades."
In China, Apple should see success with its iPhone 16 as it is likely to partner with Baidu for a large language model to fuel its Apple Intelligence features, according to Ives.
"Apple launching AI coupled by a massive pent up upgrade cycle is creating this new era of iPhone growth including in the key China region which has been a drag on the top-line over the past year," Ives said.
Apple stock is down about 1.5% since it unveiled its iPhone 16 lineup on Monday. The shares were trading at $218.25 Tuesday morning.