Bank of America delivers sharp take on Apple stock after major shift

Core Viewpoint - Bank of America is bullish on Apple stock ahead of earnings on January 29, driven by a significant partnership with Google to enhance Siri and strong demand for the iPhone 17 [1][2][4]. Group 1: Earnings Expectations - Bank of America anticipates a strong December quarter with projected sales of $140 billion and an EPS of $2.69, both exceeding market consensus [7]. - The bank expects iPhone unit sales to reach 85 million for the December quarter, reflecting a 17% year-over-year increase [9]. - Services revenue is modeled to grow by 13% year-over-year, despite challenges in the App Store in China [9]. Group 2: Margin and Growth Projections - Gross margins are expected to decline to 47.5% but are projected to improve sequentially in the March quarter as services contribute a larger share of sales [8]. - Long-term potential for margins is seen above 50% [9]. Group 3: Market Sentiment and Stock Performance - Apple's stock gained 10% last year but underperformed compared to the broader market's 20% gain, highlighting a disconnect between sentiment and fundamentals [3][5]. - The recent partnership with Google is viewed as a validation moment for Apple, positioning it for future AI advancements [4]. - Bank of America maintains a strong buy rating on Apple with a price target of $325, indicating nearly 25% upside from current levels [4].