## JP Morgan Remains Bullish on Apple, Sees iPhone AI Upsides Driving Growth
JP Morgan analyst Samik Chatterjee has reiterated an Overweight rating for Apple Inc (AAPL), setting a price target of $265. This optimistic stance is fueled by Chatterjee’s confidence in the iPhone cycle, particularly its potential to be boosted by AI advancements and the continued resilience of Apple’s Services revenue.
Chatterjee identifies several key factors underpinning his bullish outlook. These include Apple’s successful transition towards a Services-driven model, the steady growth of its installed user base, its position as a technology leader, and the strategic flexibility it enjoys in terms of capital deployment.
The analyst’s price target is based on a forward P/E multiple of approximately 27 times, applied to his earnings estimates for calendar year 2026. This multiple incorporates the anticipated upside from a robust hardware refresh cycle, particularly with AI-enhanced iPhones. Chatterjee justifies this multiple by highlighting its alignment with the average multiples Apple shares have traded at in recent years.
While the analyst acknowledges that a longer AI-driven replacement cycle could further enhance the earnings multiple, he expects strong September quarter results from Apple, surpassing consensus estimates. However, he anticipates that guidance for the December quarter might fall slightly short of expectations, a pattern consistent with Apple’s tendency for conservative projections.
Chatterjee forecasts robust iPhone shipments in the September quarter, driven by a smoother supply ramp for the iPhone 16. This smoother ramp is expected to help replenish channel inventory ahead of the holiday season. Although initial sell-through of the iPhone 16 was slower than its predecessor, recent momentum suggests improvement, though volumes remain slightly below previous figures.
While iPhone revenue for the December quarter is projected to lag behind consensus due to lower year-over-year volumes, Chatterjee believes that the launch of Apple Intelligence could stimulate demand. He expects steady annual iPhone shipments to reach 245 million units by 2025.
Chatterjee has revised his estimates for the September quarter, projecting revenue of $95.9 billion and EPS of $1.63, both exceeding consensus. In contrast, for the December quarter, he expects revenue of $125.9 billion, falling short of consensus, but with EPS likely meeting expectations due to favorable gross margins.
Apple’s recent advancements and the anticipated AI-driven iPhone upgrade cycle have led Chatterjee to maintain his December 2025 price target. With the integration of AI into its products, Apple is strategically positioned for continued growth, solidifying its leadership in the tech industry.
