Summary: Citi increased its price target on Apple Inc. to $365 and maintained a Buy rating in a note on Monday. The firm argued Apple is gaining share in a difficult devices market and can use targeted price rises to protect margins. It also outlined expectations for the September iPhone cycle, a possible foldable launch late in the year, and the limited near-term impact of Apple Intelligence on upgrade demand.
Citi's analysts expect the broader smartphone and PC markets to contract by the mid-to-high teens, yet they say Apple continues to outpace that weakness through share gains, demand driven by product design, and a strong position in the mid-range price band supported by promotions and subsidies. Those factors underpin Citi's view that Apple is better situated than many peers in a challenging sales environment.
On pricing, Citi observed Apple implemented price increases on several products mid-quarter in response to higher component costs. The note also states the company is pursuing additional memory suppliers to broaden its supply base - a move framed as a diversification of component sourcing rather than a specific supply change.
While iPhone prices remain unchanged for now, Citi anticipates Apple will press price increases during the upcoming September launch cycle, with a particular emphasis on top-tier models where demand appears more resilient. The firm additionally flagged an expected foldable device launch in the fourth calendar quarter as a noteworthy product event on the timeline.
Regarding Apple Intelligence, Citi judged it is unlikely to trigger a substantial upgrade cycle in the near term. Still, the bank argued that improved Siri AI features should raise user engagement and help expand high-margin services revenue over the longer run.
Citi pointed to the September iPhone rollout as an important catalyst that could bolster investor sentiment. On services specifically, the bank noted Sensor Tower data showing App Store revenue rose about 3% year-on-year in the June quarter, a pace below company guidance. Despite that, Citi views iCloud and advertising as relatively stronger contributors to future services growth.
The raised $365 price target reflects Citi's stronger margin assumptions and its rolled-forward financial estimates, according to the note. The firm retained its Buy recommendation, signaling continued conviction in Apple's ability to navigate a soft devices backdrop while protecting profitability.
Key impacts:
- Consumer electronics - Apple's relative market share and pricing actions affect device makers and retail dynamics.
- Technology services - iCloud and advertising expected to be important drivers of higher-margin revenue.
- Supply chain and components - price adjustments and supplier diversification reflect cost pressures in components and memory markets.
Risks and uncertainties:
- Macroeconomic demand - Citi's view that smartphone and PC markets may shrink by mid-to-high teens creates downside risk for device volumes and related sectors.
- Services growth variability - App Store revenue grew only 3% year-on-year in the June quarter, below guidance, which could temper services momentum.
- Limited near-term upgrade stimulus - Apple Intelligence is not expected to spark a significant upgrade cycle imminently, reducing an immediate upside catalyst for device sales.