Wedbush has reiterated its 'outperform' rating on Apple Inc (NASDAQ:AAPL, XETRA:APC), arguing that the tech giant is on the brink of a major growth cycle driven by artificial intelligence and underpinned by the strength of its services business.
In a detailed note to clients, analysts at the US broker said Apple is entering what they call an “AI-driven renaissance”, with a raft of new AI-powered features expected to be introduced across iPhone and Mac devices in 2026.
These upgrades, likely to be announced in the company’s annual developer conference later this year, are expected to act as a catalyst for a new product cycle.
Wedbush believes Apple’s installed base of more than two billion devices worldwide gives it a unique advantage in monetising new technologies.
The firm sees pent-up demand for upgrades, especially as AI becomes more integrated into productivity, communication, and everyday digital tasks. With many users still using older handsets, a compelling set of AI features could accelerate refresh rates, particularly in developed markets.
The note also highlights Apple’s growing reliance on its services division as a stable and high-margin source of revenue.
Services now generate more than $100 billion in annual revenue and include subscription-based offerings such as iCloud, Apple Music, Apple TV+, and the App Store.
This segment is expected to grow at a double-digit pace, supported by recurring payments, strong user engagement, and the expansion of Apple’s ecosystem into finance, health, and entertainment.
Wedbush views this services growth as a critical component of Apple’s investment case, especially as hardware sales become more cyclical.
The higher margin profile of services is also contributing to overall profitability, helping to cushion the impact of more muted demand in other areas.
While the note acknowledges headwinds, including regulatory scrutiny and competitive pressures, the firm said these are well understood by investors.
It pointed in particular to concerns about Apple’s performance in China, where slowing iPhone sales and rising local competition have raised questions about its future growth.
However, Wedbush believes the China risk is manageable and already priced in, with upside potential from other regions, particularly the US, India, and parts of Southeast Asia.
The firm also expects Apple to continue returning significant capital to shareholders through buybacks and dividends, supported by its robust balance sheet and consistent cash generation.
Wedbush concluded that Apple remains a foundational name in global technology portfolios, citing its unmatched brand loyalty, vertical integration, and ability to drive both innovation and profitability.
It sees the combination of hardware resilience, services strength and the coming wave of on-device AI as a powerful formula for sustained outperformance.
In its view, investors who take a long-term view will be rewarded as Apple begins to monetise its AI ambitions across its vast ecosystem while deepening its footprint in services and digital infrastructure.