TLDR
- Apple stock dropped 2.76% after iPhone 17 launch but analyst raised price target to $290
- iPhone Air at $999 replaces Plus model, could boost average selling prices
- iPhone Pro price jumped $100 to $1,099 with new 2TB storage option
- Google search deal worth $20 billion annually protected by antitrust ruling
- Jim Cramer maintains Apple as his portfolio “quarterback” despite recent weakness
Apple stock fell 2.76% Wednesday following the iPhone 17 launch event. Investors focused on the unchanged $799 base model price, missing key revenue drivers according to analysts.
Melius Research analyst Ben Reitzes raised his Apple price target to $290 from $260. This represents the highest target among tracked analysts and suggests 24% upside potential.
The iPhone Air emerged as the event’s centerpiece. Priced at $999, this ultrathin device replaces the midrange Plus model.
“The main thing is the $999 price point is likely to cannibalize much of the lower-priced models,” Reitzes wrote. This shift could improve Apple’s overall product mix toward premium devices.
Apple also increased iPhone Pro pricing by $100 to $1,099. The Pro Max now offers a 2-terabyte storage option, adding another high-margin product tier.
Premium Pricing Strategy Takes Shape
The iPhone Air’s design could particularly appeal in international markets. Reitzes expects the form factor may boost Apple’s market share in China where stylish designs generate strong demand.
Apple stock typically underperforms around launch events. Historical data shows an average 2.07% decline between announcement and release dates.
The new iPhone lineup positions Apple for future innovation cycles. Reitzes mentioned upcoming products including foldable phones, AR glasses, and camera-equipped AirPods.
Recent antitrust rulings cleared Google to continue paying Apple for default search placement. This partnership generated approximately $20 billion in payments during 2022, with similar amounts expected annually.
Google Partnership Drives Revenue Growth
“We remain very pleased with the recent Google Antitrust ruling,” Reitzes stated. He expects higher revenue than previously modeled from search monetization.
The ruling also creates opportunities for potential AI partnerships. Apple has been testing Google-developed AI models for search tools according to recent reports.
AirPods Pro 3 received analyst praise for live translation features. Reitzes called the capability “awesome” and upgrade-worthy, potentially stabilizing Apple’s declining wearables segment.
Jim Cramer selected Apple as his fantasy stock portfolio’s “quarterback.” He highlighted the stock’s 41% recovery from recent lows despite year-over-year underperformance.
“Apple ended up being one of our worst performers in our fantasy football stock basket over the past year,” Cramer said. “But I’m not going to be easily shaken off Apple.”
Cramer noted Apple sales are growing again and the company appears back in favor with the Trump administration. The judiciary hasn’t blocked billions in Google payments either.
Apple faces ongoing challenges including AI strategy concerns and potential tariff impacts. The stock remains down 6% year-to-date despite recent gains.
Reitzes expects Apple will eventually deliver promised Siri AI upgrades. “We know that Siri-gate was frustrating but don’t think Apple is losing share,” he wrote.
The analyst bases his $290 target on 30 times projected fiscal 2027 earnings, reflecting confidence in Apple’s ability to drive higher revenues through premium pricing and service partnerships.
