Apple’s stock price has experienced some recent weakness, down over 11% this year and more than 5% in the last week of trading. This pullback can be attributed to several forces at play, including the overall market correction and concerns over iPhone demand.
Despite the recent weakness, Bank of America remains optimistic about Apple’s long-term prospects. BofA sees a “rich catalyst path” ahead for Apple, with defensive cash flows making it their top pick for 2024. The catalysts include re-upping the capital return at its earnings, generative artificial intelligence announcements at the Apple Worldwide Developers Conference, the launch of new iPhones in the fall, and a reacceleration in gross profit dollar growth each quarter.
BofA also continues to model double-digit year-over-year revenue growth for Services and sees upside in Services margins as the business continues to scale and on long-term opportunities, including in-sourcing server chips and reducing reliance on public cloud providers.
