Daiwa Capital Markets raised its Apple price target to $375 from $335 but says the stock's rally could soon lose steam. The firm points to tougher comparisons and higher memory costs after the next two quarters.
Daiwa Capital Markets keeps an outperform rating on Apple and raised its 12-month price target to $375 from $335. However, the new price target suggests just 9% upside from Thursday's close.
Apple shares climb on iPhone 17 demand
Apple's stock is up nearly 27% year to date because of stronger-than-expected demand for the iPhone 17. It has also recently outperformed other tech shares weighed down by fears of an AI slowdown.
On Monday, Apple reported revenue of $478 billion for fiscal 2026, a roughly 15% increase year over year. Even so, shares edged down after the report because of concerns about macroeconomic headwinds.
Daiwa flags costs and supply limits
Analyst Louis Miscioscia wrote in a Thursday note that the December and March quarters should be okay because of backorder and channel fill. After that, he said, the picture gets tougher because of tough comparisons and higher memory costs.
Daiwa says rising memory costs and supply constraints for critical hardware components could hurt Apple's growth in 2027 and put pressure on shares. Miscioscia said prior contracts and inventory helped Apple hold the line on costs and margins, but this gets harder in 2027. He added that the new Duo seems very supply-constrained.
The analyst noted that Apple has not delivered two back-to-back years of double-digit growth since fiscal year 2015.
Wall Street view matches Daiwa
Daiwa's call is in line with consensus on Wall Street. Of the 43 analysts covering Apple, 25 have a buy or strong buy rating on the stock, LSEG data shows.
Source: CNBC
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