Apple Intelligence already paying off? Wall Street analysts weigh in after record earnings

The main indexes on Wall Street opened higher on Friday, driven by gains in Apple following a record-breaking set of quarterly earnings. An optimistic outlook for iPhone sales also led to price-target adjustments from several top analysts.

At Friday's opening bell, the Dow Jones Industrial Average rose 172.2 points, or 0.38%, to 45,054.36. The S&P 500 gained 25.6 points, or 0.42%, to open at 6,096.79, while the Nasdaq Composite jumped 150.6 points, or 0.77%, reaching 19,832.33, Reuters reported.

Apple sets new benchmark

During its fiscal 2025 first quarter, which ended in December, the tech giant reported revenue of $124.3 billion, marking a 4% increase from the previous year. This figure represents an all-time record and the highest-ever revenue total for a three-month period, despite iPhone sales delivering a slightly underwhelming performance, The Street reported.


Apple posted earnings per share (EPS) of $2.40, reflecting a 10% year-on-year increase.

While iPhone sales generated $69.14 billion in revenue, a 15% rise from the same period last year, they fell short of Wall Street expectations, highlighting the uneven rollout of Apple Intelligence features.

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Apple Intelligence begins to pay off

D.A. Davidson analyst Gil Luria noted that Apple Intelligence is clearly driving iPhone growth in regions where the company has made it available.

"...while iPhone growth came in lower than expected, we remain optimistic on the outlook for iPhone upgrades as Apple Intelligence is proving to be a compelling reason for users to buy a new smartphone," Luria was quoted as saying by Barron's.

The analyst has raised its price target by $30 to $290 per share following Apple's latest update.

Another analyst to increase the stock price target is Citigroup’s Atif Malik, who has raised it by $20 to $275 per share.

Noting that Apple Intelligence was showing its “upgrade potential,”Malik said the company's emphasis on end-to-end AI security is "underappreciated.”

He also believes that the DeepSeek breakthrough could accelerate AI adoption on devices.

What did Tim Cook say?

Apple CEO Tim Cook told investors during a conference call on Thursday that the company had witnessed "stronger" year-over-year performance for the iPhone 16 series across markets where Apple Intelligence has been rolled out.

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He stated that it has opened up an “exciting new frontier and is already elevating experiences across iPhone, iPad and Mac.”

FAQs

1. Which iPhone models support Apple Intelligence?
Apple Intelligence is compatible with the iPhone 16 series, iPhone 15 Pro Max, iPhone 15 Pro, iPad Pro, iPad Air, iPad mini, MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, and other models.

2. What is Apple's earnings per share (EPS)?
Apple has reported earnings per share (EPS) of $2.40, reflecting a 10% increase year over year.