Raise the target price before the earnings report! Citi: Apple (AAPL.US) is expected to continue to expand its market share

The Zhitong Finance App learned that before Apple (AAPL.US) announced its latest quarterly results on July 30, Citi released a research report to raise Apple's target price from $315 to $365 and maintain a “buy” rating. Citi believes that despite the slowdown in global smartphone and PC market growth, Apple is expected to continue to expand its market share with its brand advantages, product pricing capabilities, and continuous improvement of the AI ecosystem.

Citibank analyst Asiya Merchant said that Apple is still one of the big tech stocks it is optimistic about. She expects that Apple will continue to offset cost pressure by selectively increasing product prices, and that its high-end brand positioning and loyal user base will also help mitigate the impact of slowing demand.

Merchant pointed out that although Apple Intelligence is not expected to drive large-scale switching in the short term, the next-generation Siri artificial intelligence function will increase user activity and bring long-term growth impetus to the high-margin service business. Furthermore, the new iPhone, which will be released in September, is also expected to be an important catalyst for boosting market sentiment.

Citi expects that Apple will continue to outperform the overall smartphone and PC market in the future. Merchant said that Apple continues to maintain its leading edge by expanding market share, strengthening product design competitiveness, and consolidating its position in the mid-tier market through promotion and subsidy policies.

In terms of profit margins, Merchant believes that rising parts costs will still put some pressure, but Apple's price increase strategy is expected to basically offset the relevant impact, so the impact on profit margins is expected to be very limited.

She anticipates that Apple will raise prices for some products during the next-generation iPhone release cycle in September this year, and the focus may be on high-end models with more resilient demand. In addition, Apple is also expected to launch its first folding screen product in the fourth quarter of this year, further enriching its product line.

In terms of AI layout, Merchant anticipates that the new version of Siri may adopt a tiered billing model in the future to further enhance the revenue growth potential of Apple's service business by providing different levels of AI services.