Apple Set For Strong iPhone Upgrade Cycle Driven By AI, Analyst Says

Core Viewpoint - BofA Securities analyst Wamsi Mohan maintains a Buy rating on Apple Inc with a price target of $265, driven by expectations of a strong iPhone upgrade cycle and growth in Services revenue due to generative AI features [1] Group 1: Financial Performance - App Store revenues in fiscal Q2 2025 reached$8.6 billion, reflecting a 15% increase, with total downloads growing by 5% to 8.9 billion [2] - The app store dollars per download increased to $0.95, marking a 9% rise, while global App Store revenue grew by 11% in March [3] - Services revenue is projected to grow by 12% in fiscal Q2 2025 and 13% in fiscal 2025, with estimates potentially conservative if App Store strength continues [7] Group 2: App Performance and Trends - The Productivity category of Apps was the fastest-growing segment in fiscal Q2 2025, with revenues increasing by 54%, contributing to 4% of total revenue, up from 3% in the same quarter of 2024 [4] - Daily active users for ChatGPT on the Apple App Store surged from 4 million in January 2024 to 20 million in March 2025, indicating significant user engagement [4] - The Unified app store saw DAU growth from 13 million in January 2024 to nearly 75 million in March 2025, with ChatGPT and DeepSeek being the most downloaded apps globally [5] Group 3: Strategic Developments - Apple TV App will now be available on Android devices, potentially increasing subscription revenue by making Apple TV+ more accessible to a larger user base [6] - Apple TV averaged approximately 1.5 million DAUs in March, although it has not yet generated significant revenue [6]