Despite Apple Inc.'s (NASDAQ: AAPL) recent struggles in China, Wedbush's Dan Ives believes that the tech giant's fortunes could soon turn around.
What Happened: Ives expressed optimism about Apple's future in China, saying that he believes that these issues could soon be resolved, reported TipRanks.
Ives, who recently visited Asia, noted that Apple's iPhone production in the region has remained steady. He also pointed out that other key markets, such as the U.S., Europe, and India, have been performing well, which could offset the impact of the Chinese market's underperformance.
Despite the current challenges, Ives is confident that Apple could experience a "growth turnaround" soon.
"While some patience is required to navigate this China weakness, we believe the seeds for an Apple growth turnaround are being planted in the field," he said.
He cited factors such as "easier comps, AI announcement at WWDC, stronger upgrade cycle for iPhone 16, and the monetization opportunity of the golden installed base" as potential catalysts for this growth.
Additionally, Apple is expected to unveil its artificial intelligence strategy at the WWDC 2024, which Ives thinks could be a "watershed" moment for Cupertino.
Based on his analysis, Ives has given Apple shares an "Outperform" rating, along with a price target of $250, implying a 49% upside from the current stock price.
Why It Matters: Apple's recent struggles in China have been a cause for concern.
The company has been facing challenges from competitors like Huawei Technologies, geopolitical tensions, and a weakened Chinese economy, which have impacted its sales in the region. As far as the Apple stock is concerned, "Mad Money" host Jim Cramer warned that "owning will hurt right now."
Apple has undertaken measures like shifting its manufacturing operations from China to India to mitigate its impact.
Despite this, some analysts have expressed concerns about Apple's future. For instance, an analyst recently warned that Apple is at risk of experiencing a revenue drop in the calendar year 2024, largely due to soft iPhone unit shipments.
Price Action: On Thursday, Apple stock was up 0.66% in premarket trading, after closing at $167.78 on the previous day, according to Benzinga Pro.