Apple(US:AAPL) Goldman Sachs·2025-05-22 05:50Investment Rating - The report maintains a "Buy" rating for Apple Inc. (AAPL) with a 12-month target price of $253.00, reflecting a potential upside of 22.3% from the current price of $206.86 [1][19]. Core Insights - The upcoming WWDC 2025 is expected to showcase Apple's advancements in AI integration within its operating systems, including developer access to AI models for app development and potential Gemini AI integration on iPhones [1][2]. - Despite concerns regarding the delayed rollout of Apple Intelligence, the report highlights incremental improvements in user experience through iOS 19 and anticipates AI-enhanced features for Siri and other applications in the future [2][18]. - The report emphasizes Apple's strong brand loyalty and the growing installed base, which provides visibility into revenue growth and reduces customer churn, thereby supporting the company's premium valuation [25][26]. Financial Projections - Revenue is projected to grow from $391.04 billion in FY 2024 to $466.26 billion by FY 2027, with a compound annual growth rate (CAGR) of approximately 6.8% [13]. - EBITDA is expected to increase from $134.66 billion in FY 2024 to $160.78 billion in FY 2027, indicating a positive trend in operational profitability [13]. - EPS is forecasted to rise from $6.75 in FY 2024 to $8.80 in FY 2027, reflecting a growth trajectory that supports the investment thesis [13]. Market Position and Competitive Landscape - Apple is positioned as a leader in the technology sector, with a market capitalization of $3.1 trillion and a strong enterprise value of the same amount, indicating robust financial health [4]. - The report notes that while Apple faces competition across various segments, its unique ecosystem and brand strength provide a competitive advantage that is expected to drive future growth [25][26]. Upcoming Developments - Key features expected to be announced at WWDC 2025 include design updates for iOS 19, convenience-oriented features like AI-driven battery optimization, and Gemini integration for enhanced user experience [16][17]. - The report anticipates that Apple will open its large language models (LLMs) to app developers, which could enhance the adoption of Apple Intelligence features and drive further innovation [18].