Rothschild Upgrades Apple to Buy Amid Foldable iPhone Push and AI Strategy Shift
Rothschild & Co Redburn has upgraded Apple to Buy from Neutral, raising its price target to $400 from $260. The upgrade is driven by Apple's planned entry into the foldable smartphone market and a shift in its AI strategy.
The analysts led by Timm Schulze-Melander argue that Apple could strengthen its position by adopting open-source AI models, potentially in partnership with Nvidia. This 'Fast Follower 2.0' strategy would reduce Apple's dependence on Google, which currently costs the company around $1 billion per year for a custom version of Google's Gemini.
The upgrade also takes into account Apple's planned foldable iPhone launch, expected in September. Redburn forecasts sales of 14 million iPhone Ultra units in fiscal 2027, with only 4 million seen as cannibalizing traditional iPhone sales at an estimated price of $2,199, an 83% premium to the iPhone 17 Pro Max.