Apple iPhone 17 launch: watch for price hikes, AI plans, Wedbush says

Wedbush analysts anticipate Apple's iPhone 17 launch today will feature a $50-$100 price increase for Pro/Pro Max models, alongside a significant production shift to India, which is projected to create a ~$1 billion headwind in the September quarter. A key focus for investors is Apple's AI strategy, with Wedbush highlighting a potential partnership with Google Gemini to address prior AI-related share pressure, especially given Apple's vast iOS installed base. Wedbush maintains an Outperform rating with a $270 price target on AAPL, which is down 2.5% year-to-date.

Analysis

Apple's upcoming iPhone 17 launch is positioned as a critical event, with Wedbush analysts highlighting several key factors for investors. A potential price increase of $50 to $100 on Pro and Pro Max models is anticipated, driven by a strategic supply chain shift as the majority of iPhones for the US market are now produced in India. This transition, however, is expected to create a significant financial drag, constituting a ~$1 billion headwind in the September quarter. Beyond hardware upgrades like improved cameras and the new A19 chip, the central focus is on Apple's artificial intelligence strategy, which has been a notable overhang on the stock. Wedbush suggests a partnership with Google's Gemini or a strategic acquisition is necessary to leverage Apple's massive installed base of 4.3 billion iOS devices. A recent antitrust ruling against Google is seen as a potential facilitator for deeper AI cooperation between the two companies. Despite the stock's 2.5% year-to-date decline, Wedbush maintains an Outperform rating with a $270 price target, signaling confidence that a robust AI announcement could be a major catalyst.

Key Decisions for Investors

• Investors should closely monitor the iPhone 17 launch for any definitive announcements regarding an AI strategy, as a partnership with Google or another key player could serve as a significant re-rating catalyst for the stock.
• Factor the forecasted ~$1 billion headwind from the India production shift into September quarter earnings expectations, while assessing if the announced price hikes are sufficient to offset margin pressure.
• Given the stock's recent underperformance and the high expectations set by Wedbush's $270 price target, consider the event as a key inflection point where a lack of a compelling AI narrative could present further downside risk.
• The potential for deeper AI collaboration with Google following the antitrust ruling presents a strategic consideration for both AAPL and GOOGL, warranting attention on any developments that could alter the competitive landscape.