Apple, once the world's most valuable company, has recently suffered a decline in its stock value, leading to concerns among investors. However, Bank of America believes that the market is underestimating Apple's potential.

In a recent analysis, Analyst Wamsi Mohan upgraded Apple's stock rating from Neutral to Buy. Despite receiving several downgrades in recent weeks, Mohan predicts that Apple's earnings will exceed expectations.

Although Apple fell behind its large-cap technology competitors at the beginning of the year, it was included in the Magnificant 7 that supported the growth of the S&P 500 in 2023. Unfortunately, Apple was left out of the updated potential list for 2024.

Nevertheless, Mohan remains optimistic about Apple's prospects. He anticipates that the integration of artificial intelligence capabilities into smartphones will lead to a surge in device upgrades and bolster the growth of the company's services revenue.

Mohan boldly predicts that Apple will exceed the market's expectations in terms of iPhone unit shipments. He forecasts 231 million units in fiscal year 2024 and 244 million units in fiscal year 2025. These figures contrast with the consensus estimate of around 204 million and 211 million units for the same years, as reported by a FactSet poll.

Apple may not be in the spotlight currently, but it is positioned for an impressive comeback. With its dedication to innovation and Mohan's positive outlook, it is clear that Apple is ready to regain its status as a dominant force in the tech market.

Apple's Upcoming Innovations Set to Boost Stock Price

According to recent reports, production of iPhones is expected to increase in December, followed by a potential decrease in March. However, there are no significant changes in overall order patterns. Analysts predict that Apple will introduce AI-driven features in its upcoming iOS18, which will be monetized through improved iPhone hardware and AI-enabled third-party apps.

In light of these developments, analyst Mohan has raised his target price on Apple stock to $225 from $208. This increase is based on a price-to-earnings multiple of 32 times. Apple shares have already experienced a 2.2% rise, trading at $186.69 in early Thursday morning. While the stock is down 3% in the current year, it has shown an impressive 38% growth over the past 12 months.

The S&P 500 saw a 0.3% increase on Thursday morning, with Microsoft and Amazon.com also experiencing marginal rises of 0.6% and 0.5% respectively.

The anticipation for increased revenue continues as Apple prepares to release its earnings on Feb. 1, just one day before launching their Vision Pro mixed-reality headset. Analyst Mohan argues that over time, the revenue generated from Vision Pro could surpass that of the iPad tablet range due to its versatile applications and associated services revenue.

Analyst Reitzes from Melius Research also shared a positive outlook, stating that he sees improvement in Apple's narrative after the upcoming earnings report and in light of new product launches. Reitzes maintains a target price of $222 on Apple stock.

Overall, industry experts forecast a positive trajectory for Apple as it revolutionizes with emerging technologies.

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