Apple stock hits new high for the first time this year! iPhone 17 hot sales spark a wave of upgrades

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Apple Inc.'s stock price hit a new all-time high on Monday for the first time since 2025, after Loop Capital upgraded its rating from "Hold" to "Buy," becoming the latest institution optimistic about iPhone demand trends.

Apple shares closed up more than 3.9% on Monday, ending at $262.24, breaking the record set last December, and overtaking Microsoft to become the second largest company by market value in the US, behind only Nvidia.

In the first half of this year, Apple lagged behind other S&P 500 constituents, with a cumulative drop of up to 31% in April. But since then, Apple stock has rebounded by more than 50%, turning positive for the year in late September.

Strong Demand for New iPhones Drives Growth

Media reports indicate that the recent stock rally is mainly driven by higher-than-expected demand for the latest iPhone series, sparking optimism for the long-awaited replacement cycle. Investors are especially concerned whether consumers who bought new iPhones during the pandemic but did not upgrade for years afterward will now return to Apple stores for the latest models.

Last month, Apple launched the iPhone 17 series as well as the thinner new iPhone Air. Wall Street has been keeping a close eye on these new releases, hoping to gauge whether their market response will surpass previous years. A previous Wallstreetcn article noted that the market reaction to the new iPhones exceeded expectations, with analysts predicting that Apple's smartphone revenue will rebound 4% in the latest fiscal year, reaching $209.3 billion.

According to the latest analysis by research institute Counterpoint Research, sales of the iPhone 17 series in the first 10 days after launch in China and the US were 14% higher than the same period for iPhone 16.

The institute pointed out that the base model iPhone 17 performed notably well in the Chinese market, while the high-end iPhone 17 Pro Max saw the strongest demand growth in the US. Wireless carriers in the US, eager to attract high-value customers, boosted Pro Max sales through their subsidy programs, while the base model iPhone 17, balancing price and performance, is more popular among regular consumers.

Counterpoint also pointed out that although the new ultra-thin iPhone Air targets a more niche market and is less popular than the base iPhone 17, its sales have already surpassed those of last year's discontinued "Plus" model.

Analysts Turn Bullish

Loop analyst Ananda Baruah wrote in his report upgrading Apple stock:

"We are at the beginning of the long-awaited Apple replacement cycle."

He believes this reflects "demand growth driven by product refresh cycles and new designs." Baruah also raised Apple's target price to $315, the highest on Wall Street, implying about a 20% upside from Monday's closing price.

Previously, investors had expected a similar boost in Apple's shares following the launch of iPhone 16, but its highly publicized AI features were either delayed or ultimately absent, disappointing the market.

However, apart from Loop, more and more institutions are turning bullish on Apple. Evercore ISI listed Apple as a "strategic outperform pick," saying iPhone demand data "suggests this replacement cycle may differ from the historical average."

Melius Research analyst Ben Reitzes believes Apple is "getting back on track" and wrote: "Apple is working hard to silence the critics." He noted positive trends in the Chinese market, "overall momentum for new models is strong," and future product launches could continue to boost share prices.

Some Analysts Remain Skeptical

Some analysts are skeptical whether the early enthusiasm for iPhone 17 can sustain Apple's current valuation. Apple's current P/E ratio exceeds 32, significantly higher than the 10-year average of 22 and the Nasdaq 100 average, making it the most expensive stock among the "Magnificent Seven" aside from Tesla.

Moreover, Apple's popularity among analysts still trails other tech giants. Even with Loop's upgrade, less than 60% of analysts tracked by Bloomberg recommend buying Apple, ranking only above Tesla among the "Magnificent Seven."

Jefferies analyst Edison Lee is one of just four analysts with a "Sell" or equivalent rating on Apple. Last weekend he warned,

"iPhone 17 sales momentum is still cooling off."

Earlier this month, Lee downgraded Apple to "underperform," and stated that expectations for a "foldable iPhone" are "overblown," as the product could be too expensive and might "cannibalize" sales of the Pro Max model.

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