Apple Stock Gets Boost to $400 Target Amid AI Risks

Rothschild Redburn analyst James Cordwell upgraded Apple Inc.'s (NASDAQ:AAPL) stock to Buy from Neutral, citing the company's tightly integrated hardware, custom chips, and expanding services business as key strengths. He raised his price target for AAPL to $400, a 53.85% increase above its current price of $305.93.

Cordwell pointed out that Apple's installed base is estimated at 2.55 billion devices, with customer loyalty that is difficult for competitors to match. The services business is growing three times faster than product sales and has gross margins of 75%, more than double the 37% margin on hardware.

However, Cordwell acknowledged a potential risk from closed-source AI models from companies such as OpenAI and Anthropic, which could change how people search for information and discover apps. He noted that increasingly capable, free, open-source AI models could give Apple a path to rebuild its Apple Intelligence platform on its own terms.

Cordwell forecast iPhone sales growing at a 12% five-year compound annual rate, above consensus estimates for fiscal 2026 through 2030. He credited this outlook partly to Apple's move into premium foldable devices with the iPhone Ultra.